Film Industry Tax Incentives: State-by-State (2023)

Film production is an expensive affair; the average cost to produce and market a major movie is about $100M. Saving even a small percentage of this money would mean millions added to the spending budget for a film. To incentivize production companies to spend more money in their area, different states in the U.S. offer various tax incentives, such as tax credit, grants, and bonuses. However, these film tax incentives are often confusing to navigate since each state has a different set of rules and regulations that come with it. So we’ve put together this article to give you a breakdown of film tax incentives by state.  

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What are film tax incentives?

Tax incentives for production companies were introduced in the 90s and provided a win-win scenario for both production companies and the state. These incentives were created in response to an increasing number of movie productions shifting to other countries, like Canada.

States benefit through movies being filmed in their area because it drives the economy through employment opportunities, revenue, and related infrastructure development. However, the structure and type of tax benefits vary by state. 

Why do film tax incentives matter to producers?

As a producer, we don’t need to tell you that you spend huge sums of money when shooting your projects. Tax benefits allow you to save money on taxes, get discounts on local goods, and even receive cashback from the state, making a considerable difference to your (ever-shrinking) budget for your next project.

What are the types of incentives?

There are several types of incentives offered to production companies, and each state uses a different combination of these incentives to encourage production companies to film in their state. 

Here’s a breakdown of the most common film industry tax incentives:

• Grants: The state issues a tax-free payment to production companies for filming. 
• Film Tax Rebates: Film tax rebates are paid to production companies by the state, usually as a percentage of the company's qualified expenses. They are similar to grants, but they are taxable.
• Bonuses: These are additional perks offered to producers, such as shooting at locations free of cost, special permissions for filming in public places, hiring local staff, or discounts while buying from local businesses.
• Refundable Tax Credit: This is applicable only on tax credits. The state repays production companies' excess production credits after all income tax is paid.
• Transferable Refundable Tax Credit: The production company can transfer their tax credits to a local company to reduce or eliminate their tax liability.

How do film tax credits work?

Film tax incentives differ across every state. When picking a location, weigh the costs and benefits of shooting at a local destination vs. shooting in another state or country. 

We’ve included a list of all states in alphabetical order, a link to the application website, and a brief summary of their tax credit details.

1. Alabama

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Alabama only offers incentives on the first $20M of qualifying product expenditures. This means that if your film budget exceeds this amount, only the first $20M spent in Alabama will qualify for the film tax credit.

Qualified expenditures include pre-production, production, and post-production costs incurred in the state, including salaries and wages but excluding marketing and distribution expenses. 

The production company must spend a minimum of $150,000 in a year and at least $500,000 on the whole project in the state to qualify for the movie production incentives in Alabama.

2. Alaska

This state currently has no film tax incentive program in place.

3. Arizona

The Arizona Motion Picture Production Program goes into effect in 2023. To be eligible for the tax credit, producers must shoot their film or television show primarily in Arizona, conduct pre- and post-production in the state and hire Arizona workers to work as crew in the production. 

15% tax credit will be provided for productions of up to $10 million, 17.5% tax credit for productions of up to $35 million, and 20% tax credit for productions over $35 million. Production companies will be offered an extra 2.5% tax credit on production labor costs related to positions held by Arizona residents.

The program also provides cash refunds for production companies if the credits are larger than the amount of taxes paid in Arizona.

4. Arkansas

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For tax rebates in Arkansas, qualified expenditures include any costs incurred for development, pre-production, production, or post-production of a qualified production. Eligible types of production include animation, documentaries, feature films, pilots, video games, and scripted television. Reality tv, talk shows, game shows, and commercials are not eligible for any film tax rebate.

To be eligible for the production incentives in Arkansas, a production company needs to spend a minimum of $200,000 in the state.

5. California

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New television series, television pilots, non-independent feature films, miniseries, and movies-of-the-week are all eligible for 20% non-transferable California film production tax credits. At least 75% of their budget must be spent in the state to qualify for California’s tax incentives. If the production company has a budget of above $10M, they can apply for 25% film production tax credits. 

All productions eligible for a 20% film tax rebate are also eligible for a 5% credit uplift if expenses relating to original photography are incurred outside of Los Angeles County’s 30-Mile Studio Zone. Non-independent film productions are eligible to receive 10% credit uplift if they hire qualified local labor, while independent films and relocating TV series are eligible to receive 5%.

6. Colorado

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Qualified expenditures include production-related payments made by a production company operating in Colorado to any person or business in the state. These payments include payroll, workforce expenses, and vendor expenses. 

All production types are eligible for these film industry tax incentives except talk shows, post-only shows, and game shows.

However, the only caveat is that 50% of the crew base should consist of Colorado residents to be eligible for the film tax rebates in Colorado.

7. Connecticut

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All project types are eligible for Connecticut film tax credit, including game shows, talk shows, and reality TV; however, the production company must spend at least $100,000 in the state. 

The tax credit the company receives depends on how much they spend in Connecticut. For example, they get a 10% tax credit if their qualifying expenses are between $100,000 and $500,000; 15% for qualifying production expenses up to $1M; and 30% tax credit if qualifying production expenses exceed $1M.

8. Delaware

This state currently has no film tax incentive program in place.

9. Florida

This state currently has no film tax incentive program in place.

10. Georgia

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All project types are eligible for Georgia film tax credit, including game shows, talk shows, and reality TV.

Production companies get a minimum of 20% tax credit. The state grants an additional 10% credit if the company uses the "Made In Georgia" logo in its film credits. All production and post-production expenses must be in the state.

11. Hawaii

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All project types are eligible for Hawaii film tax credit, including game shows, talk shows, and reality TV. 

A 20% tax credit is given for filming on the island of Oahu. An additional 5% film tax incentive is given for filming on all neighboring islands.

12. Idaho

This state currently has no film tax incentive program in place.

13. Illinois

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Illinois film incentives include a 30% transferable tax credit on qualified expenditures incurred in the state. Production houses will receive an additional 15% production incentive if they hire individuals from economically disadvantaged areas, where the rate of unemployment is at least 150% of Illinois’s unemployment rate.

Qualified expenditures include tangible, personal property and services purchased from Illinois vendors, and compensation paid to Illinois resident employees.

14. Indiana

This state currently has no film tax incentive program in place.

15. Iowa

This state currently has no film tax incentive program in place.

16. Kansas

This state currently has no film tax incentive program in place.

17. Kentucky

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All projects are eligible for Kentucky tax credit, except video games and commercials. The minimum in-state expenditure required to qualify for tax incentives is $250,000 for a feature-length film or a TV show and $20,000 for a documentary. 

Qualified expenditures must be made from businesses within the Commonwealth of Kentucky.

18. Louisiana

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All production types are eligible for the Louisiana film tax credits, including reality shows, video games, and commercials. However, the production company should spend at least 25% of its budget in Louisiana. 

Some qualified expenditures for the Louisiana film tax credit include expenditure on tangible goods and services in Louisiana.

19. Maine

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All production types, except for talk shows, are eligible to receive a film tax credit in Maine. 

Qualified expenditures include expenses directly incurred in the state for pre-production, production, or post-production.

20. Maryland

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Scripted television, feature films, pilots, and commercials are eligible for film tax credit in Maryland. However, 50% of the principal photography must be in the state to receive the tax breaks.

Qualified expenses include total costs incurred in the state of Maryland that are necessary to carry out production activity. All goods and services must be provided by a qualified vendor.

21. Massachusetts

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Eligible production types to receive Massachusetts film tax credit include animations, commercials, documentaries, pilots, feature films, reality TV, and scripted television. Game shows, talk shows, and video games are not eligible. However, production companies must spend 25% of their budget in the state to receive the film production tax credits.

Qualified expenditures include pre-production, production, and post-production expenses related directly to the Massachusetts production. Equipment or other tangible personal property rented or purchased outside the state also qualifies as production expenses.

22. Michigan

This state currently has no film tax incentive program in place.

23. Minnesota

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All production types are eligible for Minnesota film tax incentives, except for game shows, talk shows, and video games. 

Qualifying expenditures for the Minnesota film tax credit include direct costs incurred in Minnesota.

24. Mississippi

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All production types are eligible for Mississippi film tax incentives except for game shows and talk shows. Qualified expenditures include production costs paid to Mississippi vendors and companies. 

Local residents earn a 30% tax incentive, and local veterans get an additional 5%. All non-residents earn 25%. However, a prerequisite is that at least 20% of the production crew must be residents of Mississippi.

25. Missouri

This state currently has no film tax incentive program in place.

26. Montana

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Eligible production types to receive transferable tax credits in Montana include animation, commercials, feature films, pilots, scripted television, and video games. Documentaries, reality television, game shows, and talk shows are not eligible to receive film tax credits. 

Qualified expenditures include pre-production and production expenditures incurred in Montana.

A 5% extra tax incentive is given if the production company uses “Film Montana” on the screen credits.

27. Nebraska

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This grant applies only to feature films shot in the state, which tell a story about Nebraska. This grant came into effect in July 2021 and does not apply to other production types. 50% of the workforce for the project must be from Nebraska.

28. Nevada

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All production types are eligible for the Nevada tax incentive. 

Qualified expenditures include pre-production, production, and post-production expenditures, such as compensation and wages, purchases, and rentals of products or services from any local business. However, at least 60% of the production budget must be spent in Nevada.

29. New Hampshire

This state currently has no film tax incentive program in place.

30. New Jersey

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All production types except commercials, talk shows, and video games are eligible for the NJ film tax incentive.

New Jersey film production tax credit offers an additional 2% of tax credit on qualified production expenses that have an application accompanied by an approved diversity plan.

31. New Mexico

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All production types are eligible for film tax incentives in New Mexico. 

Qualified expenditures include direct production and post-production expenditures made in New Mexico that are subject to taxation by the state. New Mexico has no minimum spend requirements and no project caps on their tax breaks for the movie industry.

32. New York

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New York film tax credit program offers incentives to feature films, commercials, scripted television, and pilots. 

Qualified expenses are for tangible property or services used or performed within New York State directly and predominantly in the production of a qualified film.

If the majority of your project is shot in or near New York City — near meaning specifically in Westchester, Rockland, Nassau, or Suffolk county or any of New York City’s five boroughs — your production must have a minimum budget of one million dollars.

And if the majority of your project is shot is elsewhere in the state, your production must have a minimum budget of $250,000 to qualify.

33. North Carolina

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All production types except game shows, talk shows, and video games are eligible for these film tax incentives. However, feature films must spend a minimum of $3M, and other movies must spend a minimum of $1M. The production company must have secured at least 75% of its funding before applying for a tax rebate in North Carolina. 

Qualified expenditures include pre-production, production, and post-production costs in North Carolina, including goods, services, compensation and wages, fringe benefits, per diem, living expenses, and stipends.

34. North Dakota

This state currently has no film tax incentive program in place.

35. Ohio

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All production types, except for game shows and talk shows, are eligible for Ohio motion picture tax credit. 

Qualified expenditures include goods and services purchased and consumed in Ohio. Production companies must show proof of commencement of production within 90 days of certification of eligibility for the tax credit.

36. Oklahoma

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All project types except for video games are eligible for a film tax rebate in Oklahoma. 

Qualified expenditure includes expenses incurred in Oklahoma or production costs paid directly or through an Oklahoma-based entity.

37. Oregon

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All production types except talk shows are eligible for these film tax incentives. To qualify, at least $1M must be spent on a single project or television series. All staff get a 10% tax rebate and a bonus if the company hires locals from Oregon.

Qualified expenditures include costs for production or postproduction incurred in the state, such as the purchase or renting of equipment, food, lodging, real property and permits, compensation, wages, and benefits.

38. Pennsylvania

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All production types except video games are eligible for tax credit in Pennsylvania. To qualify for the film tax incentives, 60% of the total production expenses must be in Pennsylvania. All crew earn a 25% tax credit, and a bonus of 5% is given if stage filming requirements are met.

Qualified expenditures include pre-production, production, and post-production costs incurred in the state.

39. Rhode Island

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Animation, commercials, documentaries, and music videos are eligible for film tax incentives in Rhode Island. As long as the production company meets the minimum in-state spending requirement, any amount of principal photography can be filmed in Rhode Island.

All crew earn a 30% tax credit, but the production company must hire local staff.

‍Qualified expenditures include pre-production, production, and post-production costs incurred in Rhode Island.

40. South Carolina

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Eligible production types for South Carolina film tax credits are animations, commercials, feature films, pilots and scripted television. However, the production house must spend at least $1M within 12 months and at least $1M per episode for a TV series.

All resident crew members earn a film tax rebate of 25%, and non-resident crew members earn 20% film production tax credits. 

Qualified expenditures include goods and services purchased, rented, or leased by the production company from a local supplier in South Carolina.

41. South Dakota

This state currently has no film tax incentive program in place.

42. Tennessee

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Eligible production types for Tennessee film incentives are commercials, feature films, pilots, and scripted television. 

Qualified expenditures include pre-production, production, and post-production costs incurred in Tennessee.

43. Texas

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All production types are eligible for Texas film tax incentives. 60% of the film must be shot in the state to qualify for Texas film production tax credits.

The resident crew earns a 5% tax credit if the budget is less than $1M. They earn 10% for a budget between $1M-$3.5M and a film tax rebate of 20% for a budget above $3.5M. The state gives a 2.5% tax credit for any project that completes 25% of its filming days in economically disadvantaged areas. 

Qualified expenditures include payments made to Texas companies for goods and services directly used or related to production.

44. Utah

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Eligible production types to receive film tax incentives in Utah include animation, documentaries, 

feature films, pilots and scripted television. A cash rebate will be given to projects with a budget smaller than $500,000 if at least 85% of staff are locals of Utah.

Qualified expenditures for film production tax credits include production expenditures made in Utah that are subject to state taxes.

45. Vermont

This state currently has no film tax incentive program in place.

46. Virginia

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Eligible production types for the tax credit in Virginia are commercials, documentaries, feature films, pilots, scripted television, and video games. To qualify for the film industry tax incentives, at least 50% of the principal photography must be in Virginia.

All crew will get at least a 15% tax credit. A 5% bonus is given to residents if the production is filmed in an area of the state which is at an economic disadvantage. A 10% bonus is given to non-residents if the budget for the project is between $250,000 and $1M. 

Qualified expenditure for production incentives includes expenses made in Virginia in the form of services or products, including leased products.

47. Washington

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The production types eligible for tax incentives in Washington are animation, commercials, documentaries, feature films, pilots, reality TV, and scripted television. 

Qualified expenditures include pre-production, production, and post-production costs incurred in Washington. Non-residents get a 20% film tax rebate, whereas residents get 30%-35% depending on the type of production.

48. West Virginia

This state currently has no film tax incentive program in place.

49. Wisconsin

This state currently has no film tax incentive program in place.

50. Wyoming

This state currently has no film tax incentive program in place.

Wrapping Up

While applying for these incentives can seem overwhelming, finding the right location to film in can be well worth your time when you could save millions on taxes or other expenses. When budgeting for your next project, take your time and get familiar with the best film incentives in the US. If you ever need help with your application, you can always contact the individual state film boards.

For more specific tax break know-how, take at our posts for Georgia, New York, and California.