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The film incentive, known as the Ohio Motion Picture Tax Credit, is a refundable, non-transferable tax credit of 25 – 35 percent off the amount of a production company's qualifying expenditures that are incurred in producing a film or other media entertainment project in Ohio.
Tax credits are designed to replace tax liability. Therefore, to receive a tax credit, the production company must file an Ohio tax return when filming is completed. The allowable credit will be used against the taxpayer's Ohio individual or corporate income tax liability for the taxable year in which physical production was completed.
The tax credit is available to eligible production companies, that is, entities that are "in the business of producing qualified productions." The term "production" means an entire motion picture or media project. The term "production company" therefore refers to the company that bears the overall responsibility for making (or producing) the project as a whole. Companies that are vendors to a production company DO NOT qualify for the credit.
The entire amount of your spending in Ohio must be at least $300,000 to be eligible for tax credits.
The program provides a refundable, non-transferable tax credit certificate to be taken against a business' corporate franchise tax or an individual's Ohio personal income tax obligations. The credit is based on eligible production expenditures (EPEs) (see below).
Upon completion of filming, the production entity must submit documentation of qualifying expenditures and any other documentation required by the Ohio Film Office. Once this process has been satisfactorily completed, the Ohio Film Office will issue an Ohio Motion Picture Tax Credit Certificate stating the final amount of funding the production is eligible to receive. The certificate is then used during tax filing.
Yes, as long as expenditures were made after June 3, 2009. However, the program is competitive, and projects submitting applications before the start of principal photography are preferred.
You can do both, but one must be mailed. Some applicants will scan and e-mail to get it in faster.
The application can be found online here. Complete the application and send it to the Ohio Film Office along with:
Ohio Development Services Agency, Ohio Film Office
77 South High Street, Floor 28
Columbus, Ohio 43215
For more information, contact the Ohio Film Office at (614) 644-5156 or email@example.com.
Applications will be considered in the order in which they are received. All applications will be reviewed for completeness, compliance with the law (Ohio revised code 122.85 and Ohio Admin code 122:21) and these guidelines. The Ohio Film Office may consider the following criteria in its review of applications:
The Ohio Film Office will endeavor to respond to applications within 15 days after receipt of the required information.
If an application for a tax credit is approved, the Ohio Film Office will prepare and send (e-mail) an Award Letter to the applicant. The Award Letter will specify the maximum amount of eligible tax credits. In addition, the applicant's obligations will be included, consisting of, but not limited to, the following:
Upon approval and certification by the Director of the Ohio Development Services Agency that the project is a tax credit eligible production, the applicant shall receive an invoice for a non-refundable application fee in an amount equal to one-half percent (.5%) of the estimated value of the tax credit as calculated in Section 4 of the application (up to a maximum of $10,000). The fee shall be due and payable within 45 days of receipt of the invoice and notice of the Director's certification of the project.
The application fee shall be paid by check or money order made out to Treasurer, State of Ohio, and sent to the Ohio Development Services Agency, Ohio Film Office, 77 South High Street, 28th Floor, Columbus, Ohio 43215. The Director shall not issue an Ohio Film Production Tax Credit unless the application fee has been received.
To maintain eligibility, within 90 days of receiving your Motion Picture Tax Credit Award Letter, the applicant must submit a "Film Tax Credit 90 Day Progress Reporting Form" to the Ohio Film Office. This form will be sent to you when you received your Award Letter. The report shall include, but is not limited to, reviewable of progress on the project. During review of the report, the Ohio Film Office may request additional information, conduct a site visit, or discuss the report with the applicant. The applicant will have 15 calendar days to supply any additional information requested by the Ohio Film Office. The applicant's failure to report to the Director of the Ohio Development Services Agency or failure to demonstrate reviewable progress in a report to the Director of the Ohio Development Services Agency may result in rescission of the Ohio Film Office's certification of the production as a tax credit-eligible production.
In most cases the Ohio Film Office will respond within 15 business days.
Any production related expenditures not identified below should be discussed with the Ohio Film Office prior to submitting the application.
(EPEs must be made in Ohio to qualify for the tax credit. Production expenditures do not, however, have to be made exclusively in Ohio.)
The Ohio Motion Picture Tax Credit provides a refundable tax credit that equals 25 percent off in-state spending and non-resident wages, and 35 percent off Ohio resident wages on eligible productions.
Yes. Compensation payments made to above the line personnel such as producers, directors, writers, and actors are "direct production expenditures" eligible for the 25 - 35 percent credit amount. Compensation payments made to below the line personnel such as technical crew members are also qualified.
Production personnel (cast and crew) are considered a resident if they are in Ohio for more than 60 days before an agreement is approved. Residency must be proven with an Ohio driver's license or an Ohio voter's registration card.
Simple pass through transactions will not qualify as "direct production expenditures" made in this state. However, in general, the existence of an added markup by the permanent Ohio business that is consistent with industry norms would suggest that the transaction has economic substance in Ohio and is not merely a pass through transaction. Therefore, it is likely to qualify.
No. Only services performed entirely within Ohio qualify for the tax credit.
No. The service still is not being performed in Ohio. The payroll processing business would qualify only if the payroll services were entirely performed in Ohio.
No. The nature of the transaction remains substantially that of payroll processing because the true employer of the employees whose payroll is being processed is the film production company.
Payroll refers to gross pre-tax wages, so payroll tax is not qualified as an eligible expenditure. Union pension, health, and welfare are classified under resident or non-resident cast and crew wages in the "Payroll" section.
Workers' compensation insurance is considered a fringe benefit, and fringe benefits are generally eligible for the Ohio Motion Picture Tax Credit as wages or compensation.
Yes. The described fringe benefits are eligible for the Ohio Motion Picture Credit (see below).
That depends on whether the crew members are residents of Ohio.
Yes. The law specifically provides credit for this type of expense as long as the company is indeed "Ohio- based."
An insurance agent is based in Ohio if the insurance agent has a bricks and mortar storefront in Ohio with at least one full-time employee and at least a one year Ohio presence.
Insurance qualifies if it is associated with one of the eligible production expenditure categories (i.e. insurance on equipment).
Eligible production expenditures only refer to "goods and services purchased and consumed in the state of Ohio (ORC 122.85 (4))."
Yes. In that case, if the transaction occurs between the qualified film production company and an Ohio- based rental business the expenditure would qualify for a tax credit. However, the transaction must have economic substance and not merely be a pass through transaction.
A transaction has economic substance if there is an industry norm markup by the Ohio vendor, and would be further demonstrated if the Ohio vendor and the non-Ohio vendor were unrelated.
Yes. A taxpayer is required to file an Ohio tax return in order to obtain a tax credit or refund.
No. The Ohio return may not be filed before the end of the return year. A taxpayer must file their annual return at the end of the return year to claim the tax credit, and any refund.
You can expect an error-free return to be processed within 4 – 6 weeks.
Yes, provided that:
1) The financing is obtained from a bank or other lender with a bricks and mortar storefront and at least one full-time employee and one year of physical presence in Ohio;
2) All loan services are performed in Ohio; and
3) An appropriate rate of interest is charged to the production company.
No, as only expenditures qualify for the tax credit and under capitalized interest payment is deferred to a future date.
Only interest actually paid up to the point in time a post-production tax credit certificate is requested will qualify.
When the Ohio Motion Picture Tax Credit Award Letter is sent to you should receive a 90 Day Progress Reporting Form. This must be e-mailed or faxed to the Ohio Film Office, 90 days after the Award Letter is sent to you. This is a good time to amend your tax credit amount.
Production companies should send a letter to the Ohio Film Office with a revised budget, revised total, and Ohio expenditures, and identify the new credit they are seeking. The letter should be signed by an authorized representative.
Approval of additional credits is not automatic. The state will respond with a letter authorizing additional credits if the request is approved.
Expenditures made prior to written approval by the state will not qualify for the tax credit.
No. They are generally not subject to taxation as the law requires. However, to the extent that the payment exceeds federal income tax limits and is considered taxable for federal purposes the excess will be eligible for credit.
Yes. They are generally subject to taxation as required by law. However, if they are not subject to federal income tax it is likely they will not be subject to Ohio tax and therefore will not qualify for credit.
Yes, to the extent that the service is obtained from an Ohio location. If goods are delivered into Ohio from an out-of-state location, the shipping charge does not qualify.
Yes, because the Ohio Motion Picture Tax Credit incentive is a tax credit under the Ohio law and must be established through the filing of a tax return.
It is $20 million for all productions per fiscal year, but it cannot exceed $5 million per certified production.
At the time of certification an "up-to" amount is certified for the duration of the production, and when the C Certified Public Accountant (CPA) report comes in, the company receives the amount in a tax credit of the lesser of a) the certified amount and b) the actual amount.
The company receives its tax credit certificate at the end of its production when the CPA report comes in.
Only one motion picture company will serve as the "certificate owner" for the tax credit. The company will then take the tax credit certificate against its Corporation Franchise Tax return, and list its flow-through entities on the return. The credit will be allocated appropriately.
The end of the production is the "tax credit eligible production's "production complete date". This means when activity in Ohio wraps, the CPA can submit its expenditure report and a tax credit certificate may be issued.
The independent certified public accountant report due to the Director of the Ohio Development Services Agency under division (D) of section 122.85 of the Ohio Revised Code shall certify to the Director that the applicant's reported costs of a tax credit- eligible production are eligible production expenditures as defined in section 122.85 of the Ohio Revised Code. In addition, the independent certified public accountant shall:
(1) Complete the Ohio Motion Picture Tax Credit Final Production and Economic Impact Report that was emailed to the production company;
(2) Certify to the Director that the loan-out talent contractors are registered with the Ohio Secretary of State to do business in Ohio;
(3) Review and certify to the Director all contract and expense items greater than or equal to $10,000, and review and certify to the Director no less than 50 percent of the contracts and expense items less than $10,000;
(4) Certify to the Director that all eligible production expenditures for the tax credit eligible production were incurred during the period of July 1, 2009 to the production complete date; and
(5) Certify to the Director that the goods and services claimed as eligible production expenditures were performed or consumed in Ohio:
(A) The costs of the certified public accountant's report shall not qualify as an eligible production expenditure.
(B) Within 60 days of receipt of the independent certified public accountant's report, the Director shall review and provide a written notice to the applicant accepting the report or identifying any deficiencies in the report, and if the report is accepted, identifying any disallowance of expenditures claimed and providing the reason for any disallowance. If the report does not satisfy the reporting requirements, the applicant shall have 30 days after the notice date to cause the independent certified public accountant to remedy the identified deficiencies. Also, within 30 days of receipt of the Director's notice of any disallowed expenditure, the applicant may request reconsideration and provide additional documentation in support of the report. The Director shall consider all relevant information submitted and respond in writing. Upon reconsideration, the Director's determination shall be final.
(C) If the applicant fails to provide a report of an independent certified public accountant within the time allowed by this rule and complying with the requirements, no tax credit certificate will be issued.