Thursday, January 24, 2008

Wisconsin’s Film Tax Credits – It is Time to Start.

Effective January 1, 2008 the State of Wisconsin’s film tax credits went into effect. These credits were created to encourage the film, television and video game industries to produce their projects in Wisconsin. A few weeks later, on January 22, the Milwaukee Journal Sentinel reported that several productions were planning to take advantage of Wisconsin’s new film tax credits. The newspaper reported that the film “Blue World” will be filmed in Milwaukee and “The Violinist” will be filmed in Green Bay. Additionally, producers of the film “Public Enemies” (expected to star Johnny Depp) have applied to the Wisconsin Department of Commerce to qualify for the tax credits. Film production companies, those that will provide the industry with essential infrastructure, are also getting into the act.

The tax credits are anticipated to encourage these film, television, video, video game and broadcast advertisement producers to spend large amounts of their production budgets in Wisconsin. In return, the state will give them some of their money back. Hopefully this will pump a substantial amount of money into the Wisconsin economy, grow Wisconsin’s reputation as a film friendly state and reward those who produce qualifying productions.

The Wisconsin Statutes provide four types of tax credits:
1) The Film Production Services Credit.
2) The Film Production Expenditures Credit.
3) The Sales and Use Tax Credit.
4) The Film Production Company Investment Credit.

Certain productions are specifically excluded from qualification, such as, news or sports programs and talk shows but for the large number of productions that do qualify, the credits may be claimed if certain statutory requirements are satisfied. When a production meets the requirements, the tax credits may be claimed by individuals, insurance companies or corporations (partnerships, some LLCs and S corporations cannot claim the credits directly, however, the credits may be passed through to the owners in proportion to their ownership interests).

The next several posts to this blog will address some of the technical aspects of these tax credits and some of the procedures for obtaining the credits.

No comments: