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Key Fact About Motion Picture Production In The United States Of America

Movie production incentives are tax benefits offered on a state-by-state basis throughout the United States to encourage in-state film production. These incentives came about in the 1990s in response to the flight of movie productions to other countries such as Canada, China and India. Since then, states have offered increasingly competitive incentives to lure productions away from other states. The structure, type, and size of the incentives vary from state to state. Many include tax credits and exemptions, and other incentive packages include cash grants, fee-free locations, or other perks. Proponents of these programs point to increased economic activity and job creation as justification for the credits. Others argue that the cost of the incentives outweighs the benefits and say that the money goes primarily to out-of-state talent rather than in-state cast and crew members. The State of Michigan offers no tax incentive. The State of Illinois offers 35% and the state of Ohio offers 30%. Michigan’s tax credit for film production has the potential to be the highest in the entire country. Essentially, this would mean that an entity with a business in each state could save up to 115% on Federal & State taxes if the state of Michigan reopens the film tax incentive. The film making tax credit bills (SB 0862-0863, HB 5724-5725) are still pending passage in the Michigan House and Senate (currently being reviewed by the Tourism & Commerce Committees). Likely they will be passed this year, reinstating a film-making tax credit program (MI had a tax credit in place until it was eliminated in 2015). The proposed legislation would give a base tax credit starting at 25% for in-state spending, with an additional 5% to include the Filmed in Michigan logo. It would also provide a 30% credit for hiring. Michigan residents and 20% for nonresidents. If approved, the proposed incentive would last 10 years and would have caps for different types of productions like movies and commercials. This would be a win-win for both filmmakers & production companies, but also Michigan (would make the state a lucrative destination for filmmakers once again). Obviously, without passage of the bills, MI would remain near the bottom of the list of sought after shooting locations given 40+ other states have tax credit / rebate programs in place for filmmaking / production.