Tax Incentive
Definition
A government program that refunds or credits a portion of production spending in a specific state or country. Tax incentives can cover 20% to 40% of qualifying production costs, making them one of the largest sources of film financing. Most programs require a minimum spend and have caps. Some states offer refundable credits (cash back) while others offer transferable credits (sold to a local business).
Example
You shoot your $500,000 film in Georgia, which offers a 30% transferable tax credit on qualifying spend. You sell the credit to a Georgia-based company for 90 cents on the dollar, generating approximately $135,000 in financing.
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