Georgia Film Tax Credits: An Easy Tax Saving Opportunity
When you pay your Georgia State income tax, there is a sticker price that the overwhelming majority of residents pay, and then there is the amount that is allowable. This is where the Georgia Film Tax Credits come in.
How does it work?
Georgia Film Tax Credits were created to entice production companies to come to Georgia and spend their money on movies, films, commercials, etc. The way it works is that production companies get a 20% credit on what they spend for certain expenses while making their project. They get an additional 10% for providing that cool Georgia Peach logo at the end of the movie/episode/etc. Most times, these production companies can't use all of these credits and the Georgia Department of Revenue allows them to sell the credits before they expire.
What are the Benefits?
This is perhaps the easiest way to reduce your Georgia tax liability. Most of the credits are purchase for 87-92% of their face value. So for example, if you had a Georgia income tax liability of $50,000, you could purchase enough credits at 89% of there value that would equal $44,500. This $50,000 would apply to current year or prior year taxes owed and any remaining amount could be carried over up to five years.
What are the Risks?
Yes, there are potential risks.
First, who is backing the availability of the credit? Most of the major film producers (including Sony, NBC Universal or Viacom) will stand behind any of the credits they sell. Meaning, if for some crazy reason the Georgia Department of Revenue were to disallow the credits, the production company or their parent company would make the buyer whole. If you are considering a no name production company that has not undergone a thorough review, it would be prudent to pass on that.
Second, you will only want to work with a broker that has several deals under their belt. Since the industry (and credit buying) is still less than 10 years old, you want to work with a broker that knows what they are doing.
Third, there are different levels of audit that will "validate" the actual credit. The bare minimum is having a CPA firm do a "review" of the expenses to verify that it will qualify for the credits. This is the lowest standard of audit. At the highest end, is when the Georgia Department of Revenue will actually audit the expenses to determine the amount of the credit...talk about getting it straight from the horses mouth! These are the ones we like to work with.
What are the Next Steps?
We can walk you through the entire process to make sure that you understand all the parameters and the amount of taxes you will have saved along with the ROI and your out of pocket costs.
Here is a brochure directly from the state of Georgia that explains more.
How does it work?
Georgia Film Tax Credits were created to entice production companies to come to Georgia and spend their money on movies, films, commercials, etc. The way it works is that production companies get a 20% credit on what they spend for certain expenses while making their project. They get an additional 10% for providing that cool Georgia Peach logo at the end of the movie/episode/etc. Most times, these production companies can't use all of these credits and the Georgia Department of Revenue allows them to sell the credits before they expire.
What are the Benefits?
This is perhaps the easiest way to reduce your Georgia tax liability. Most of the credits are purchase for 87-92% of their face value. So for example, if you had a Georgia income tax liability of $50,000, you could purchase enough credits at 89% of there value that would equal $44,500. This $50,000 would apply to current year or prior year taxes owed and any remaining amount could be carried over up to five years.
What are the Risks?
Yes, there are potential risks.
First, who is backing the availability of the credit? Most of the major film producers (including Sony, NBC Universal or Viacom) will stand behind any of the credits they sell. Meaning, if for some crazy reason the Georgia Department of Revenue were to disallow the credits, the production company or their parent company would make the buyer whole. If you are considering a no name production company that has not undergone a thorough review, it would be prudent to pass on that.
Second, you will only want to work with a broker that has several deals under their belt. Since the industry (and credit buying) is still less than 10 years old, you want to work with a broker that knows what they are doing.
Third, there are different levels of audit that will "validate" the actual credit. The bare minimum is having a CPA firm do a "review" of the expenses to verify that it will qualify for the credits. This is the lowest standard of audit. At the highest end, is when the Georgia Department of Revenue will actually audit the expenses to determine the amount of the credit...talk about getting it straight from the horses mouth! These are the ones we like to work with.
What are the Next Steps?
We can walk you through the entire process to make sure that you understand all the parameters and the amount of taxes you will have saved along with the ROI and your out of pocket costs.
Here is a brochure directly from the state of Georgia that explains more.
| tax-brochure-incentives-film-music-digital-entertainment.pdf |
Simply fill out the form below and we will get you an estimated savings on your Georgia state income tax liability.