State-by-state production incentives
Massachusetts
| Massachusetts | |
| Incentive Type | Transferable tax credit or refundable at .90 |
| Incentives Highlights | 25% transferable tax credit (or refundable) on qualifying spend; all cast and crew working in MA count, as do local goods and services. |
| Eligible Projects | Films, television, pilots, series and commercials plus digital media |
| Minimum Spend | $50,000 and 51% of the project must be shot in the state. |
| Production Cap or Annual Cap | No annual cap or project cap, but only the first 27 episodes of a TV series will qualify per year. |
| Application/Reporting Requirements | Productions must complete registration with the state. |
| Loan-Out Reg Required? | Yes |
| CPA Audit? | Yes |
Massachusetts Film Office
Lisa Strout, Executive Director
lisa.strout@state.ma.us
t: (617) 973-8400
f: (617) 973-8525
www.mafilm.org
OVERVIEW
The Massachusetts incentive offers a 25% income tax credit equal to the total in-state spend if at least 50% of the movie is shot in-state or more than half the production budget is spent in-state, without salary or annual production caps. Filmmakers may choose to receive the credit as a rebate, equal to 90% of the face value (guaranteed and rebated by the state), or the credit may be transferred or sold at the current market rate. Minimum spend is only $50,000. Cast and crew from out of the state qualify. However, Massachusetts now requires state withholding taxes to be paid on all qualifying wages. All loan-out companies must register and are subject to 5.3% withholding tax. Additionally, filmmakers may be eligible for a 100% sales tax exemption on any production related items purchased in the state. Note that production insurance, workers compensation and completion bond are not qualified expenses. Massachusetts has a growing crew base, and most equipment can be obtained locally.
DETAILS
Only the first 27 episodes of a TV series will qualify per year.
Pre-production, production, and post-production expenses qualify as long as they are directly incurred in the production of the film. Qualified expenses include payroll; payroll means salary, wages or other compensation including all fringe benefits. Costs associated with marketing or advertising a picture, the transfer of the tax credits, or any amount paid as profit participation do not qualify.
The incentive is comprised of two components: a payroll credit and a production spend credit. The payroll credit is equal to 25% of the total payroll that is sourced to Massachusetts, when production costs exceed $50,000 for the taxable year. For purposes of the payroll credit, total payroll does not include any portion of the salary of any employee whose salary is equal to or greater than $1,000,000. Both residents and non-residents working in Massachusetts qualify for the payroll credit.
The production spend credit is equal to 25% of all Massachusetts production expenses (not including the payroll expenses included in the labor credit) if total production costs incurred in Massachusetts exceed $50,000 for the taxable year, and either the Massachusetts production expenses are more than 50% of the total budgeted production costs, or at least 50% of the total principal photography days take place in Massachusetts. For purposes of the production credit, the entire amount of each salary that is equal to or greater than $1 million may be used to calculate the production credit (if the entire salary was not included in the payroll credit). Recent rules have been implemented to insure proper registration and tax payments on loan-out companies.
The credits can be carried forward for 5 years, but once the credits have been transferred they are no longer refundable.
In addition, a point-of-purchase sales tax exemption is available for qualified expenses. An application is available at www.mafilm.org and must be filed in advance for this exemption.
There is currently a sunset provision in the law which calls for the film tax credit to expire at the end of December, 2022.