Incentives
Fee-Free Filming on State Lands
Filming on state land is fee-free regardless of grazing or other leases. A permit is required, which is processed through the Arizona Dept. of Commerce Film Office.
Arizona Motion Picture Tax Incentives Effective January 1, 2006
Please contact the Arizona Dept. of Commerce Film Office for an application and further information.
Income Tax Credits:
Provides a transferable individual and corporate income tax credit for motion picture production costs in Arizona. The credit for a motion picture production company is based on a sliding scale based on the total amount of production costs paid in this state as follows:
- $250,000-$1M can be eligible for a 10% credit
- $1M-$3M can be eligible for a 15% credit
- Over $3M can be eligible for a 20% credit
Transaction Privilege and Use Tax Exemption (TPT & Use tax):
Allows a motion picture production company to be exempt from the following TPT & Use tax activities:
- Purchases of machinery, equipment and other property used directly in the motion picture production.
- Leases or rentals of lodging space.
- Catered food, drink and condiments to the motion picture production company.
- Construction of any buildings or other structures associated with the motion picture production in this state.
NOTE: In order to qualify for the incentives, a motion picture production company must submit a completed application with all requested information and agree to include an acknowledgment in the credits of the film that the production was filmed in Arizona.
The initial qualification must include a report to the Arizona Dept. of Commerce (ADOC) and Arizona Dept. of Revenue (DOR) regarding the name of the Motion Picture Production Company and related information including who will maintain the records of expenditures in this state. The report will include information of projected dates of production and pre-production, estimated total budget and estimated percentage of production and expenditures in Arizona, including employment information, script, director, producer and cast members.
The company must incur production costs in this statue during a 12-month period of at least $250,000. Production costs include:
- Salaries and other compensation for Arizona residents
- A motion picture story and scenario
- Set construction, operations, wardrobe, props, accessories and related services
- Photography, sound synchronization and lighting
- Editing and related services
- Rental facilities and equipment
- Catered food, drink and condiments
- Other direct costs that would be allowed under rules adopted by DOR
A motion picture production company must employ the following percentages of Arizona residents in its production activities to qualify for the incentives:
- In 2007, at least 35% of full-time employees
- In 2008 and subsequent years, at least 50% of full-time employees
ADOC must review applications and make a determination of eligibility within 30 days. If approved, the ADOC will issue a letter of qualification and send a copy to DOR. A company may not receive income tax credits in excess of $5 million per motion picture production. Obscene motion pictures are not eligible for any incentives. ADOC may not qualify a company that has delinquent TPT and use tax or income tax. All information submitted will be considered confidential.
One pre-approved, production must begin within four months of pre-approval date for eligibility to be maintained.
For a complete list of current rules and procedures, visit www.azcommerce.com/film. You may also e-mail incentive-related questions only to: motionpicture@azcommerce.com.
This information was supplied by The Arizona Dept. of Commerce Film Office.
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