Michigan Film Production

40% Tax Rebate (refundable tax credit) For Michigan Production (42% in Core Cities)

Out of State Below The Line wages are pegged at 30%. Above The Line 40%.

40% refundable tax credit against Michigan Business Tax (MBT) liability for qualified film or digital media pre-production, production, and postproduction costs incurred in Michigan. Alternatively could be claimed against Michigan income tax withholding tax liability.

Refundable and assignable (transferable). This is a “refund” or “tax rebate” equal to 40% of qualified production expenditures, not a credit against taxes owed. Additional 2% credit in core communities.

Wages paid to non-Michigan residents eligible as a qualified expenditure capped at $2 million per person per production.

$50,000 minimum spend. No project cap. No annual cap. No sunset.

Income Tax Exemption for Reinvestment in Michigan Productions

Allow an income tax deduction equal to all or a portion of a gain realized from an equity investment of at least $25,000 in an qualified production in Michigan, if the initial investment plus the gain, or a portion of the gain, is reinvested in a new qualified production within one year.

Sunset on September 30, 2015.

Infrastructure Development Incentives

Film & Digital Media Infrastructure Investment Tax Credit

Investment of $250,000 or more in Michigan film or digital media production infrastructure (such as studios, equipment, or other facilities) eligible for a 25% tax credit against MBT liability.

Credit is assignable or may be carried forward.

Total credits allowed limited to $10 million annually.

Credit reduced for brownfield credits claimed for same investment.

Sunset on September 30, 2015.

MEGA Eligibility for Film & Digital Media Production Companies

Authorize film and digital media production companies to apply for and receive tax credits issued by the Michigan Economic Growth Authority (MEGA) against MBT liability.

FINANCING INCENTIVES

Film and Digital Media Investment Loans  (not currently funded)

Authorize the Michigan Strategic Fund to offer loans from the Jobs for Michigan Investment Fund (part of 21st Century Jobs Fund Program) for up to $15 million per qualifying film and digital media productions in Michigan.

Loans can be 0% with backend participation by the Jobs for Michigan Investment Fund in lieu of interest.

Terms of loans are negotiated and production budget must be at least $2 million. A guarantor for the loan must be in place. Production must be wholly or substantially shot in Michigan. Qualified production company eligible for both loan and 40% production tax credit.

Choose Michigan Film and Digital Media Production Loan Program  (not currently funded)

Authorize a qualified production company to receive all or a portion of the value of discounted tax credits the company is eligible to receive in the form of a loan from the Jobs for Michigan Investment Fund approved by the Michigan Strategic Fund. Credits would be pledged for the repayment of the loan.

Loans would be provided an interest rate of up to 2%.

Minimum loan amount would be $500,000.

No loan would be greater than the discounted value of the tax incentives pledged.

Production company would be responsible for loan repayment regardless of performance of primary tax incentive.

Capital Access Program for Film and Digital Media Producers  (not currently funded)

Authorize film and digital media production companies to participate in the capital access program established by the Michigan Strategic Fund under the 21st Century Jobs Program.

Participating banks throughout Michigan would offer CAP loans directly to production companies that need credit enhancement. Similar to a loan loss reserve fund, the bank, the production company, and the Michigan
Strategic Fund pay a small premium into a reserve that makes it possible for the company to receive fixed asset and working capital financing in the form of a private loan from the bank.

Workforce Development Incentives

Film & Digital Media Worker Job Training Tax Credit

50% refundable MBT tax credit for expenditures incurred by an eligible production company to provide on-the-job training for Michigan residents in advanced below-the-line crew positions on qualified productions.

Expenditures eligible for job training tax credit could not also be claimed for the 40% production tax credit.

Sunset on September 30, 2015.

Enhance Michigan Film Office

Enhance Michigan Film Office

Formalize, update, and enhance the powers, duties, and functions of the Michigan Film Office and Michigan Film Advisory Commission.

Transfer Office to the Michigan Strategic Fund with staff support and related resources provided by the Michigan Economic Development Corporation.

Change name of Michigan Film Commission Advisory Commission to the Michigan Film Office Advisory Council and increase terms of office for members of Council from 3 to 4 years with staggered terms.

Prohibit authorized claims of agency or employment relationship with the Film Office.

Repeal Sections 21 and 22 of the History, Arts, and Libraries Act.

Increase Financial Support for Michigan Film Office

Create the Michigan Film Promotion Fund to support and provide additional dedicated funding to support the Michigan Film Office.

Charge a 0.5% application and redemption fee for all film-related tax credits, with proceeds deposited in the Michigan Film Promotion Fund to support the Michigan Film Office.

Require 50% of any state earnings on a loan or investment in a production from the Jobs for Michigan Investment Fund be deposited in the Michigan Film Promotion Fund.

* Information Disclaimer: This is a Preliminary summary of proposals. Verify info with the Michigan Film Office.

For The Michigan Film Office Text of the Michigan Film Incentive Bills go here:

http://michiganfilmoffice.org