Guide to Connecticut Business Tax Credits Film Production Tax Credit
Film Production Tax Credit
Description and Applicable Taxes
A Film Production tax credit is available to any eligible production company which produces a qualified production and incurs qualified production expenses or costs. This tax credit is administered by the Connecticut Department of Economic and Community Development (DECD).
No eligible production company incurring an amount of production expenses or cost that qualifies for this tax credit shall be eligible for this tax credit unless such company:
- Conducts not less than 50% of principal photography days within the state;
- Expends not less than 50% of postproduction costs within the state; or
- Expends $1 million or more in postproduction costs in this state.
No production expenses or costs incurred outside this state will qualify for this tax credit. This tax credit may be applied against the taxes imposed under Chapter 207 and Chapter 208 of the Connecticut General Statutes. This tax credit may be assigned.
Eligible production company means a corporation, partnership, limited liability company, or other business entity that is engaged in the business of producing qualified productions on a one-time or ongoing basis, and is qualified by the Secretary of the State to engage in business in the state.
Qualified production means entertainment content created in whole or in part within the state, including motion pictures; documentaries; long-form, specials, mini-series, series, sound recordings, videos and music videos, and interstitials television programming; interactive television; relocated television production; interactive games; video games; commercials; any format of digital media, including an interactive website, created for distribution or exhibition to the general public; and any trailer, pilot, video teaser, or demo created primarily to stimulate the sale, marketing, promotion, or exploration of future investment in either a product or a qualified production via any means and media in any digital media format, film, or videotape, provided such program meets all the underlying criteria of a qualified production.
Production expenses or costs mean those qualifying expenditures that are clearly and demonstrably incurred in the state in the preproduction, production, or postproduction cost of a qualified production.
Tax Credit Amount
The tax credit is equal to:
· 10% for production expenses or costs of $100,000 to $500,000;
· 15% for production expenses or costs of more than $500,000 to $1 million; and
· 30% for production expenses or costs of $1 million or more.
Carryforward and Carryback Limitations
No carryforward or carryback is allowed. A taxpayer claiming this tax credit may claim all or part of the tax credit in the income year the cost giving rise to the tax credit were incurred or in any of the three succeeding income years. The amount of tax credit earned but not claimed in an income year shall be available during the three succeeding income years after the production expenses or costs giving rise to the tax credit were incurred.
How to Apply
- An eligible production company must submit an eligibility application to DECD on an annual basis, but no later than 90 days following a qualified production’s first eligible expenditure.
- An eligible production company may apply for an interim tax credit voucher no earlier than 90 days after the filing of the eligible application.
- An eligible production company must file a final tax credit voucher application within 90 days of the end of the company’s annual fiscal period or 90 days of the last qualified production expense.
- An eligible production company must pay the administrative fee charged by DECD for reviewing the application.
Visit DECD’s website at www.ctfilm.com for complete details regarding the application process.
DECD will enter the amount of the production company’s tax credit on a tax credit voucher. There shall be independent certification by a licensed Connecticut Certified Public Accountant (CPA) approved by DECD of the production expenses or costs incurred during the period for which such voucher is issued.
Assignment and Transfer
Any tax credit allowed may be sold, assigned, or otherwise transferred, in whole or in part, to one or more taxpayers, provided no tax credit, after issuance, may be sold, assigned, or otherwise transferred, in whole or in part, more than three times. In the event of an assignment, the transferor and the transferee shall jointly submit written notice of such transfer to DECD not later than 30 days after such transfer. The notification after each transfer shall include the tax credit voucher number, the date of transfer, the amount of such tax credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and transferee, and such other information as DECD may require.
An entity that is not subject to tax under Chapter 207 or Chapter 208 of the Connecticut General Statutes may not assign more than 50% of its tax credits for the 2011 income year and may not assign more than 25% of its tax credits for the 2012 income year and beyond. These assignment limitations do not apply if:
- The entity owns, directly or indirectly, 50% or more of an entity is subjected to the business entity tax under Chapter 213a of the Connecticut General Statutes, or
- The qualified production giving rise to the credit was filmed at a qualified production facility that: 1) is located in Connecticut; 2) is intended for film, television, or digital media production; and 3) has had an investment of $3 million, or less if DECD determines the facility otherwise qualifies.
How to Claim the Tax Credit
Complete Form CT-1120 FP, Film Production Tax Credit, and attach it to
Where to Get Additional Information
Direct inquiries to:
Connecticut Department of Economic and Community Development
Office of Film, Television, and Digital Media
Statutory and Regulatory References
Conn. Gen. Stat. §12-217jj; Conn. Agencies Regs. §§ 12-217jj-1 through 12-217jj-13