This guest article reminds me that I need to complete the list of film incentives by state (and province). As you will see, not all incentives are slam dunks. -JO

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How to Avoid Pitfalls in State-Sponsored Film Incentives
by Laura Pratt
Producer, Red Canyon

An Overview of Film Incentives

Tax incentives for film are a fantastic boon for the film industry and can be a powerful lure to entice films to specific locations. These are frequently offered by way of a state economic fund and take the form of rebates, tax incentives, or tax credits. Each state has their own rate of incentives, which go from around 10% to 12% in Utah, to 25% in New Mexico, and 40% in Puerto Rico.

Every state has certain requirements to qualify for film incentives and different criteria for filmmakers. When you’re looking at where to take your film it’s important to clearly understand the incentive programs in the states that you’re looking at.

It’s also important to understand that as a producer you have a tremendous amount of power. Feature films pump millions of dollars into state economies each year, often with almost zero negative impact.

Caveat Emptor: Let the Producer Be Wary

However, it pays to be savvy about incentives. In 2007 my independent film company, Red Canyon Pictures, LLC, began our search for locations for our film Red Canyon. The film had a great cast and a reasonable budget for an indie and fit almost every state’s requirements to qualify for film incentives. On the low end this would have returned a welcome $180,000.00 rebate. On the higher end of the incentives scale Red Canyon Pictures, LLC would have netted around $400,000.00 in rebates.

Although, at the time there was only a 12% rebate for filming in rural Utah, we were fairly committed to the state, primarily because it offered some of the most spectacular natural locations in the nation. We were somewhat concerned, however, because the film was certain to garner an R-Rating. The subject matter for “Red Canyon” is intense and disturbing – and certainly not the type of film you think about when you think of Utah.

The Utah State Film Commission assured the producers of Red Canyon, that as long as films were not pornographic in nature, content was not an issue. So Red Canyon, committed to Utah with the reassurance from the commission that the incentives were practically guaranteed.

In the end several films were not granted rebates that filmed in Utah in 2007. It turned out there were no codified rules for granting tax incentives in Utah and that the board that grants the incentives had recently undergone a sea change. Had our film been earlier in the year, or perhaps later, we probably would have been given the incentives. A film with much the same subject matter was approved for incentives in the winter of 2007.

Unfortunately, by the point that we knew our production had been turned down for the incentive program we were locked into Utah and were forced to forgo any incentives.

The whole experience with the Utah Film Commission left a sour taste. The incentives were an important part of our planning process and losing them created a $200,000. shortfall in our budget. Had we known initially that we’d be denied the incentives we could have planned accordingly, but we were forced to adapt halfway through pre-production.

Guidelines to Ensure That Your Film Will Receive Incentives

It may seem too onerous or too expensive to look at a variety of states for locations, but if you can prove that you are an actual production many state film commissions will actually pay for initial location scouts, even if you are looking at more than one state.

Don’t get myopic, if you have a good story the location is secondary… let it go if it doesn’t garner you the valuable rebates.

Honesty, It’s a Tough Policy, But…

It’s important that before you commit to a state or country that you get script approval for the film you want to shoot. Be sure to be honest about the feature – at the time that our film was denied incentives – another film shot in Utah had their incentives revoked because the film was much gorier and sexier than had originally been presented. In any state local crews are likely to have relationships with the state film commissions. Word gets around, so don’t lie, or submit a sanitized version of the script. You’ll get busted.

Hold Out for the Gold Ring

Don’t lock into a state until you are told that your production qualifies for the rebate program and are given proof of that decision in writing. It’s also important to make it clear that filming in that state in contingent on receiving the incentives and that your company is looking at other options.

Watch for Subtext

Some film commissions won’t mention it up front, but they might have unspoken guidelines, as well as those printed in black and white. Some film commissions won’t give incentives to non-studio films, but they are unlikely to mention that in their spiel. Some states won’t give incentives to films likely to have an R–rating. Sometimes productions simply get “Homered” and film incentives only go to those associated with key players in the state.

Take a look at what productions have been given incentives in the past. Take a good look at the state’s past ten films that received incentives and see how your film compares.

Make Sure It’s Worth It

Some states may have incredible film incentives, and yes, your production will qualify, but there may be other factors you will want to consider. What is the reputation of the local crews and union? Are likely to gouge your eyes out and make you call them mommy? Is the location too far from L.A. to entice great lead talent? Are you going to end up eating so much in transportation costs that the great rebate will be nullified by higher production costs?

Putting it Into Perspective

Where your production ends up may not have anything to do with film incentives. “Red Canyon,” chose Utah because the landscape simply couldn’t be replicated anywhere else and that sense of awe and isolation was a key element of the story. We also had a certain amount of nostalgia for the state and wanted to invest in the community.

Two other key benefits to filming in Utah were that it was a “right to work state” and the close proximity of Utah to Los Angeles. Perhaps even if we’d known we wouldn’t receive the tax incentives from the beginning we still would have chosen to film in Utah. In the end, sometimes the desire to make a great film, with a fantastic look, trumps business in the business of filmmaking.

If you’re interested in knowing more about Red Canyon, you can see pictures and a synopsis at IMDB,

Picture illustration by, under the site’s Creative Commons license. Text copyright Laura Pratt. Reprinted with permission.