Missouri Film Production Tax Credit

Missouri offers the highest film production tax credit currently available in the United States.

Upon review of a pre-certification application, the Missouri Department of Economic Development (DED) may issue state income tax credits equaling up to 50% of a film production company’s qualifying expenditures in Missouri. No single project may receive more than $1 million in tax credits.

To qualify for Missouri’s tax credit incentive program, a production company must spend at least $300,000 in state (i.e., payments made to Missouri companies, organizations or individuals) during the making of the film. Such expenditures may include, but are not limited to: the costs for labor, services, materials, equipment rental, lodging, food, location fees and property rental. Missouri currently caps its total available film production tax credits at $1.5 million dollars per year.

Missouri’s tax credits are fully transferable for up to five tax periods after they have been issued. The tax credits may be applied against state income taxes (excluding withholding taxes) or financial institution taxes. The original recipient may use these credits against their own tax liability, or they may sell or transfer the credits to another taxpayer (or institution) who may apply the credits against their own tax liability.

Film Production Tax Credits are issued only after the Department of Economic Development completes a thorough financial review of all qualifying production expenditures made in Missouri.

For more detailed information on Missouri’s Film Production Tax Credit Program (Section 135.750 RSMO), visit:

http://www.missouribusiness.net/film/incentives.asp.

To access tax credit forms, visit the following websites:
Tax Credit Pre-Application Form: http://www.missouribusiness.net/film/pdf/preapplicationform.pdf
Expenditure Form: http://www.missouribusiness.net/film/pdf/expendituresform.pdf

Recommended Revisions to the Film Production Tax Credit Program

To Create new jobs and attract more film production business to the state, the Missouri Film Commission conducted a comprehensive analysis of the incentive programs of Missouri and other states and has developed six recommendations.

Commission Recommendations
1. Raise the Annual tax credit program cap from $1,5,000,000 to $10,000,000.
2. Eliminate the $1,000,000 dollar cap per qualifying production.
3. Set new minimum in-state expenditure limits to qualify for tax credit: $100,000 for productions longer than 30 minutes (movies & TV shows); $50,000 for productions less than 30 minutes (TV shows and commercials).
4. Set a 6-year sunset clause for the program.
5. Define which labor costs will count toward toward tax credits and exclude “highly compensated individuals” (those earning more than $1,000,000) from being counted as a qualified expense toward earning tax credits.
6. Define precisely what types of productions will and won’t be accredited to receive tax credits.

Rational for Recommendations
1. Raise the Annual Tax Credit Program Cap
In 2006, all available tax credits were allocated to just 4 films by mid-year.
16 additional films applied for or expressed serious interst in tax credits.
More than $9,000,000 in tax credits could have been extended.
Film production expenditures in Missouri would have exceeded $21,000,000.
With additional tax credits, the total economic impact in Missorui in 2006 alone would have been:
– Nearly $53,000,000
– 465 FTE film production jobs could have been created
2. Eliminate Dollar Cap Per Qualfiying Production
Enable the Missouri Film Office to market the state to larger budget films and TV series
Make Missouri competitive with nearby states.
3. New Minimum In-State Expenditures
Match thresholds set in 2006 by Illinois and Wisconson.
Better enable the state to compete in recruiting national TV commercials, providing additional employment to local crews and promoting the growth of Missouri’s film production infrastructure.
4. Set a 6-Year Sunset Clause
Provides an automatic legislative review of program’s effectiveness, consistent with guidelines established in the 2006 session of legislature.
5. Define which Labor Costs Count toward Tax Credits and Exclude Highly Compensated Individuals
Encourage the hiring of Missouri cast and crew.
Ensure that one person’s wages will not cost the state up to $500,000 in tax credits.
6. Define which Productions Qualify for Tax Credits
Ensure that tax credits are used on projects that best serve the objective of long-term growth of Missouri’s film production industry and infrastructure.