Filmmakers Need To Consider Shoot location tax incentives

February 27, 2016

Shoot location tax incentives are an important for film makers to consider when trying to create a film.

Depending on the state a production team chooses to film in, there may be shoot location tax incentives involved.

Tax breaks are important to actors, directors, producers, studios and everyone else involved in the development of a film. These incentives often have a part in determining the location of a set. Matthew McConaughey, for example, named film credits as a reason he can be found in New Orleans so often. McConaughey, a Texas native, most recently returned to the Pelican State to film his upcoming movie “Free State of Jones.” He also starred in the first season of the critically acclaimed “True Detective,” which was set in Louisiana.

Shoot location tax incentives are an important for film makers to consider when trying to create a film.

“There’s a great tax break to make films here,” he told Joe Bargmann, who asked him why he repeatedly returns to New Orleans in an interview for a Garden & Gun article.

Actor Matthew McConaughey said in an interview that he loves New Orleans because of the tax breaks.

State-by-state tax breaks can draw film makers, or push them away
Tax breaks such as those McConaughey takes advantage of in Louisiana often factor into decisions about where to film. They differ by state, and depending on location can offer huge savings. Essentially these incentives come in the form of a refund or rebate offered to the production team. The money is a portion of the total qualified amount spent in the state. When filming is finished in a given location, the production team will provide an account of spending to the state. That account will then be reviewed, and the proper return eventually will make its way back to the film team.

State regulations regarding tax incentives factor heavily into a studio and production team’s decision were to film. For example, Las Vegas Weekly noted that despite the city’s recent successes as a result of incentives in 2014 and 2015, more recent and less appealing credit packages could drive filmmakers to competing states, such as New Mexico.

Will meager tax credits stunt moviemaking in #LasVegas

— Las Vegas Weekly (@lasvegasweekly) January 29, 2016

JR Reid, the founder of JR Lighting, told the publication that Las Vegas could lose business as a result of the decision to remove certain incentives. He explained that his hope that production teams are offered attractive tax packages again shortly.

“We’re not the only people looking at this” he explained. “It’s national, even international. Investors and big companies and financiers – and back to the people on the ground – look at these decisions and wonder if they should plant a flag here. Once we renege on [tax incentives] they don’t think we’re serious.”

Choosing a location is just a part of budgeting
Nevada and New Mexico are just two states out of 50, though. While, according to Reid, “meager incentives” may drive film makers away from Las Vegas, other states and cities feature attractive tax packages that regularly appeal to studios and producers. Movie studios are the beneficiaries of a huge collection of tax breaks. The industry as a whole collects around $1.5 billion in state and local tax credits annually, according to The New York Times. To get a relatively large chunk of that total, though, takes research into where production companies and studios stand to gain the most.

Like in real estate, in film production the motto is “location, location, location.” Choosing the right state is a huge part of staying within the budget. Check back soon for part 2 of this story, our state-based breakdown of where film production companies and studios stand to benefit the most from shoot location tax incentives.

To read part two of the “Shoot location tax incentives” series, please follow the link below:

Great Places To Find Shoot Location Tax Incestives For Filming

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