Kentucky isn’t usually on the top of filmmaker’s lists of “places to film”, but after Kentucky revamped their film tax incentive program in March 2021, y’all may want to reconsider. Kentucky has a 30%-35% Nonrefundable and Nontransferable Tax Credit for Feature Films, Broadway Productions, Industrial Films, Documentaries, and Television Shows. Not to mention their low production costs, film-friendly communities, diverse landscapes and locations, low minimum spending to qualify, and their generous “2 years to start, 4 years to finish” agreement. Kentucky offers aggressive tax incentives for film production, making it one of the more affordable film production locations in the United States.
What are the basics?
Qualified productions can take advantage of a nonrefundable and nontransferable income tax credit of 30% of approved expenditures, 35% of Kentucky resident labor and 30% of non-resident labor, or; 35% incentive for approved expenditures and all labor for filming in an enhanced incentive county which makes up a large portion of the state.
Film production incentives are available to companies that spend at least $250,000 to produce feature films or television shows in Kentucky. Documentaries and Broadway productions are eligible with an expenditure minimum of $20,000. For a Kentucky-based company, the threshold would be $10,000.
There is a $100,000,000 cap per year on approved incentives. Once the total annual cap is approved, the film office cannot approve any further applications for tax incentives for that calendar year.
Applications for film production incentives will be reviewed and approved by the Kentucky Film Office, Secretary of the Tourism, Arts and Heritage Cabinet, the Finance and Administration Cabinet, and the Kentucky Tourism Development Finance Authority. The Kentucky Tourism Development Finance Authority meets once a month to approve incentive requests. The meetings are held at 1:00 p.m. on the third Wednesday of every month at 500 Mero Street, Frankfort, KY 40601. The remaining dates for the year 2021 are November 17, 2021, and December 15, 2021. Per the statute, an approved company has 2 years from the date of the tax incentive agreement to start the motion picture or entertainment production and must have it completed no more than 4 years from the execution of the tax incentive agreement. It is possible for the production to have expenses over multiple years. You do not have to have your financing in place in order to apply. You have up to two years from your agreement date to begin production and four years to complete it. Your production company must be registered to do business with Kentucky. Loan-out companies need to register for a KY withholding account number in order to remit the withholding on those actors that do not get paid through payroll. The registration for this account is not needed months in advance but can be applied for when the actor is hired.
What are the thresholds for each type of production?
For Non-Kentucky-Based Production Companies:
- Feature Film, Industrial Film or Television Show - $250,000
- Documentary - $20,000
- Broadway Production - $20,000
For Kentucky-Based Production Companies:
- Feature Film, Industrial Film or Television Show - $125,000
- Documentary - $10,000
- Broadway Production - $20,000
Kentucky has a yearly cap of $100,000,000 on film incentives.
What are eligible expenses?
Kentucky has a long list of eligible expenses. Here is s brief overview of what they allow: Production script and synopsis Set construction and operations Wardrobe, accessories, and related services Lease or rental of real property in Kentucky as a set location Photography, sound synchronization, lighting, and related services Editing and related services Rental of equipment Vehicle leases Food and accommodations
How do I apply?
Kentucky Film incentive application fees are 1/2 of 1% of the estimated Incentive amount or $500, whichever is greater. Follow the link below to apply:
Kentucky Film Office Tax Credit Application
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