Tax incentives

dlevanchuk

dlevanchuk

Could somebody please explain to me in simple language what is tax incensive and how the hell do I get one?
I sure I can't just say, "hey state washingtom I need 10,000 ".

So, in easy stupid proof language, how do I get it?
 
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Every state has a film office. They will know all of the tax incentives that you might be able to use, and in my experience, they're generally nice and helpful folk.

Looks like these are your people:

WASHINGTON STATE FILM OFFICE
1218 Third Avenue, Suite 1709
Seattle, WA 98101
(206) 264-0667
www.filmwashington.com
http://www.washingtonfilmworks.org/

Looks like Seattle has an office as well. Not sure if they'd have any tax incentives, but I guess it's worth a phone call.

http://www.seattle.gov/filmoffice/productionresources.htm
 
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dlevanchuk said:
Could somebody please explain to me in simple language what is tax incensive and how the hell do I get one?
I sure I can't just say, "hey state washingtom I need 10,000 ".

So, in easy stupid proof language, how do I get it?
Click to expand...

You apply for the credit. If approved then you can cash flow it via a loan against the credit itself... The state doesn't actually pay anything. Really the only way to monetize it is to take a loan against what is essentially a contract between you and the state, saying they'll give you a certain value in tax credits.

For Washington, here's the states guidelines:
http://www.washingtonfilmworks.org/index.php/Incentive/Guidelines/

If you qualify initially under those guidelines, submit an application:
http://www.washingtonfilmworks.org/index.php/Incentive/Application/


After production wraps you send them your final costs breakdown, and then they'll issue a tax credit. Depending on the state, it may or may not be refundable (deliverable in cash, if you have no state tax liabilities) or it may or may not be a transferable credit (which you can sell off to another company that can use it to write down their tax liability).
 
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dlevanchuk said:
Could somebody please explain to me in simple language what is tax incensive and how the hell do I get one?
I sure I can't just say, "hey state washingtom I need 10,000 ".

So, in easy stupid proof language, how do I get it?
Click to expand...
The others have given you excellent links - you want it in "stupid proof"
language. You will need to spend a specific amount in the State. The
State doesn't give you money they return some of the money you spent.
In Washington you need to spend at least $500,000.
 
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Some states (MA is one of them, I'm pretty sure) have a secondary market where you can sell a tax credit that you can't use at a discount from the face value to someone who can use it. This is helpful if you have a tax credit but not a tax liability that you can use it against. Again, you have to spend a fair amount of money on the movie and in the state to (a) be eligible and (b) have it be a significant amount of money.
 
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mlesemann said:
Some states (MA is one of them, I'm pretty sure) have a secondary market where you can sell a tax credit that you can't use at a discount from the face value to someone who can use it. This is helpful if you have a tax credit but not a tax liability that you can use it against. Again, you have to spend a fair amount of money on the movie and in the state to (a) be eligible and (b) have it be a significant amount of money.
Click to expand...

Wow, that sounds really scammy and illegal to me. Is it?
 
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No, it's legal. It's similar to a company selling a receivable, so that they get a percentage of the face value now and in cash, and the buyer hopes to get the full amount in the future, thus giving them a profit.
 
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