Michigan's 40% Tax Incentive! crazy...

I am a film/video major graduating this semester in western michigan. I AM f-ing STOKED! I was planning on moving to chicago or cali after graduating but i guess i'll be staying around here. the minimum budget is $50,000 for a 40% tax refund. So in other words, you can make a $50,000 movie for $30,000 or you can make a $1,000,000 for $60,000. HOLLYWOOD, I AM FOR HIRE!!!!!!
 
Larry R said:
I wonder if there are companies that will buy your incentive up front. So you show them a budget for $100K and knowing you will get $40K back, you sell that incentive to the company to get say $30K up front and then they collect on the back end.

Or something like that :)
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I know JP Morgan Chase has some type of program for that because I remember seeing something about that for films using the incentive programs in Louisiana. I'm guessing it works out to something along the lines of they front you the incentive % for what you're going to spend in that state, they make a little interest from the "loan" ... then you pay it back when the state cuts you the check.
 
NOMADIC said:
MA - 20%
CT - 30%
LA - 25% (the state, not city...duhhhh)
NC - 15%

And California ... 0%

they all have different rules, but thats about what it comes around to.
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I've been looking into the different incentives around the country - and figured it was worth pointing out that IF I'm understanding things correctly - no other state seems to come close to what is being offered in Michigan right now.

While Connecticut offers 30%, it is important to note that is a 30% Tax Credit.
The state of Connecticut is not giving you a 30% cash rebate.

Most states aren't writing checks the way Michigan does.
Florida seems to be one of the exceptions - offering a 15-17% cash rebate on productions of 100K or more (until next year anyhow).
New Mexico offers a rebate of 25%, with some interesting local crew 'mentoring' rebates as well.
 
Yeah, I just dug into Louisiana's system. They offer 25%, but only as a tax credit, which is applied against your Louisiana state income tax return.

You can, however, sell your tax credit back to the governor's office, at 78% on the dollar, and apparently that becomes a cash rebate. 78% of 25% = 19.5%. Not even half of what Michigan is offering, and remember with Michigan you can even stretch it to 42% if you shoot in one of the 100+ "targeted communities."

Plus, Michigan gives you the incentive if you spend as little as $50,000. In Louisiana, you have to spend at least $300,000.
 
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So if shooting in Michigan would you be responsible for Michigan income tax on those wages?

And if so - anyone know the rate off hand?
 
This is good for true independent films with a budget (the between $100k and $2mil range) I think.

The bigger wave though is still going out of the country. Studios are being built in countries like Bulgaria because they can get increasingly skilled and experienced workers for about $200 per month. So no subsidies are needed. And they do not have to pay US taxes on most of their expenses.

Like it or not, they are headed the same direction as the rest of corporate America.

I have to work, but hopefully later I can give some ideas on what I think US States can do to help boost independent films other than tax breaks like Michigan and other states have done. Meanwhile, I do think what Michigan has done is good. It's an plan that brings money, and leaves little or no footprint. Just that much more could be done.
 
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