Clocktower Tax Credits President Jeff Jacobson hosted an informative online discussion on “Tax Credit Basics” at the 30th Woods Hole Film Festival on August 7, 2021. Jeff was joined by Audit Supervisor Michael Kasianchuk of Kevin P. Martin & Associates P.C. to discuss the process of both earning and then monetizing the state film tax credit. The discussion focused on Massachusetts, but also addressed other state tax incentive programs. The panel fielded questions from the audience to help filmmakers understand how they can maximize these generous government subsidies.
“The session was especially important now that Massachusetts finally made the state film credit permanent,” Jeff explained, “by eliminating the 2022 Sunset provision in the state statute.” Nearly 200 filmmakers were invited to attend and represented states including Rhode Island, Connecticut, New York, and Pennsylvania. When asked where the best location to film was, from the tax credit perspective, Mike concluded that Massachusetts had the best combination of credit rate, credit availability, low budget threshold, and helpful State Film Office.
Mike explained the difference between transferable tax credits and rebates or refundable credits. While rebates might return a filmmaker 100 cents on the dollar, the filmmaker has to complete the film, wait until year-end to file his or her tax return, and then wait for the state to issue the reimbursement. This process may take months or even a year or more. By selling the credit, for 90 cents on the dollar, for example, the funds are immediately available to the filmmaker upon completion. As an alternative, the producer may be able to borrow against the value of the expected tax credit, and thus have funds with which to complete the production.
Mike went on to describe the accounting aspects that producers should consider in anticipating earning a tax credit. Mike certainly recommends engaging or at least early on consulting with a production accountant and/or auditor experienced with Film tax credits in the chosen state.
The Woods Hole Film Festival is dedicated to presenting the best independent film from emerging filmmakers internationally. Over the past 30 years, the Woods Hole Film Festival has presented thousands of films to Woods Hole audiences, adapting and growing each year. This year’s film program included 150 films selected from around the world: 22 feature narratives and 30 feature documentaries and 51 short drama, 16 comedies, 23 documentaries, and 8 animations. Clocktower sponsored Last Night in Rozzie, a Massachusetts-made film with the highest in-person attendance at the festival.
Transferable tax credits can be earned in Massachusetts, Connecticut, Rhode Island, Illinois, Ohio, Pennsylvania, New Jersey, Georgia, and New Mexico, among others. For more information on how you as a Producer can benefit from state tax credits, please call Jeff Jacobson at (978) 823-0200, or email him at JJacobson@ClocktowerTC.com.