• Mallory Law Office

Lights – Camera – Taxes!

You might be surprised to learn that both federal and state tax codes offer incentives to encourage film and television production. In fact, Section 181 of the Internal Revenue Code gives most film and television productions a tax deduction of up to $15 million of production costs ($20 million for productions in economically distressed areas). The deduction can be taken during the first year of production and applies only to productions commenced before the end of 2014. Despite Congress’s recent action to extend the provision, it remains to be seen whether the tax incentive will apply to productions begun in 2015.

In addition to the federal deduction, many states offer a variety of incentives to encourage filmmakers to produce somewhere other than Hollywood. States believe these incentives attract award-winning films to their locations, such as “Mud” (Arkansas) or “The Curious Case of Benjamin Button (Louisiana). However, at least some evidence exists that state film incentives may be falling out of favor.

For the time being, however, Ohio filmmakers may be able to take advantage of the Ohio Motion Picture Tax Credit, a refundable, non-transferable tax credit of 25-35% off the amount of a production company’s qualifying expenditures that are incurred in producing a film or other media entertainment project in Ohio. More information on the state incentive is available from the Ohio Film Office, along with a map of Ohio’s famous television and movie filming locations.

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