Film incentive programs are created by legislatures across the nation to offer an enticement to film and TV producers to shoot TV shows and movies in their state. So far, forty states in the US have some sort of film incentive program. There is also a federal tax incentive program, passed in October, 2004. That program - Section 181 of the US Tax Code provides for a tax incentive for films where at least 75% of the total production is completed within the US borders. This is an addition to what a state may offer.
Each state with a film incentive program has variations to them but most include tax incentives, requirements to use local and state businesses, talent and crew. Some also include accelerated depreciation, as the US version does, giving producers an immediate write-off of production costs within the year of production. Most film incentive programs also have a production budget threshold where some require spending over $500,000, others less than $15 million.
Legislatures are changing, adding or dropping their film incentive programs so check each state to see what they may offer.
Considering 40 states in the US are already offering various film incentive programs, they are popular and often used as an example of how a state can bring in jobs and income with a relatively small investment. It often does not require expensive investments in planning, construction and infrastructure. But it has had limited success. Some states do well with them and while others, not so much.
The idea was born out of frustration in the US when Canada developed its first film incentive program in the 1980’s designed to pull film and TV production out of the US to Toronto and Vancouver. At first, few considered it a problem. Before long though movie goers and TV watchers became increasingly disappointed at stories that were supposed to be based in Colorado but clearly the production companies had never set foot in Colorado, or how the skyline of Toronto began to double for New York City.
The film incentive program in Canada became so successful that a new phrase was created to define it – the runaway production. Film and TV production is now big business in Canada as a surprising number of productions made for the US market are still to this day being produced there.
Essentially, each of the 40 states in the US are attempting to do the same thing as Canada – pull productions out of Los Angeles, New York and now Canada and bring them to their states for what some see as easy money with the use of a film incentive program. The challenge is to offer what the producers require in locations, crew and talent while giving them the discounts the productions need like tax incentives.
But at the core, an incentive program can only consistently work when there is an intensive program to develop programming ideas within the state. Otherwise each state will continue to complete for limited opportunities and will be at the mercy of producers looking for the best deal, not the story location.