State-by-state production incentives

Connecticut

Office of Film, Television, and Digital Media
Connecticut Department of Economic and Community Development
George Norfleet, Director
george.norfleet@ct.gov
t: (860) 270-8088
Ed Ruggiero, Tax Incentive Programs
ed.ruggiero@ct.gov
t: (860) 270-8211
www.ctfilm.com

OVERVIEW

Connecticut’s incentive offers a possible

30% transferable tax credit for qualified digital media and motion picture pre production, production and post-production expenses incurred in the state, including labor. Production companies incurring production costs between $100,000 and $500,000 are eligible for a 10% credit; between $500,000 and $1 million are eligible for a 15% credit, and productions spending over $1 million receive a 30% credit. The minimum spend requirement is $100,000 and at least 50% of the principal photography days or 50% of postproduction expenses – or at least $1 million on post-production must be spent in Connecticut.

Salaries for both resident and nonresident cast and crew working in Connecticut qualify. The aggregate qualified salaries for all star talent is capped at $20 million, and must be subject to Connecticut income tax. Equipment and supplies purchased/ rented from out-of-state do not qualify for the tax credit.

New regulations have been adopted: for income year 2011, no more than 50% of the credits may be transferred (sold) in one year. Starting in 2012, 50% may be transferred the first year, and 25% per year over the next two years. However, if the production shoots a portion of the film at a qualified production facility, these restrictions do not apply.

There are a number of qualified facilities in the state, with some new stages planned or presently under construction.

There is no statewide annual cap or per production cap. Note that all fringes and per diems qualify for all cast and crew, resident and non-resident.

DETAILS

Qualified expenses include digital media production; deferred, leveraged or profit participations and costs related to the transfer of the production tax are not qualified expenses.

The production company must be registered to do business with the Secretary of the State of Connecticut. To receive the credit, the production company must first apply to the Office of Film, Television, and Digital Media for eligibility. This application must be made no later than ninety days after the first production expense is incurred.

The production company must submit a certified audit (at the production company’s expense) by an independent CPA selected from the DECD-approved auditor list. After the costs are verified, the Film Office will issue a tax credit voucher. An eligible production company is not entitled to claim tax credits before the production tax credit voucher is issued. Loan-outs must register to do business in Connecticut, in order to qualify for the incentive.

Once issued, the production company may sell, transfer or assign the voucher, in whole or in part, either directly to a local taxpayer or to a broker. The tax credit may not be sold, transferred or assigned more than three times. Once the tax credit voucher is issued, the state may not conduct any further review or audit of the associated expenditures except in the case of fraud or misrepresentation. In the case of fraud or misrepresentation, the state’s sole remedy is with the production company that committed the fraud and not from any transferee. The non refundable credit may be carried forward for three years after the year in which the costs were incurred. Corporations, insurance companies, hospital and medical service companies may use the tax credit. Individuals may not use the credit. The 12% hotel occupancy tax is waived for stays over 30 consecutive days. There is also sales tax exemption for certain production related items.