Missouri
(as of August, 2008)
Productions in Missouri can earn 35 percent of their Missouri expenditures in the form of state tax credits. The tax credits are completely transferable. Since the Kansas City metro area straddles the state line, the State of Missouri now also allows productions to count Kansas-side crew and talent at the full 35 percent rate. For more info, go to www.mofilm.org.
To qualify for film tax credits, the film production company must spend, during production, at least $50,000 in the State of Missouri (for projects 30 minutes or less) and $100,000 for projects longer than 30 minutes. These expenditures may include, but are not limited to, the costs for labor, services, materials, equipment rental, lodging, food, location fees and property rental. Missouri’s film production tax credit program is capped at $4.5 million per year.
Required Forms for Missouri:
Letter of Intent (pre-application)
Expenditures Form
Kansas
Kansas offers a 30% non-refundable, nontransferable tax credit on total in-state expenditures. The Kansas legislature has allocated $2 million/tax year to fund a 30% tax credit to eligible film production companies.
This fund is currently limited to productions filming during Tax Years 2007-2013. Subject to the approval of an application to the Kansas Department of Commerce – Kansas Film Commission, the allocation of these funds will be on a first-come, first served basis.
For more information see the Kansas Film Commission website: www.filmkansas.com
NationalÂ
The information provided below is a summary of a federal program and is provided by Ernst & Young and the Directors Guild of America on an informational basis only. It should not be viewed as tax advice with respect to your production activities. For such advice, consult with your tax advisor.
The American Jobs Creation Act (H.R. 4520), signed into law in 2004, includes new tax provisions to encourage domestic film production. Film and television productions benefit in three ways:
 1. Section 181 – This section of the IRS tax code allows an immediate tax write-off of production expenditures for domestic film and television productions with aggregate costs under $15 million (or, in certain low income areas, productions with aggregate costs under $20 million). This means that for qualified productions, production expenses may be deducted in the year the expenditure occurs, instead of being depreciated over a period of years using the traditional income forecast method. For a production to be eligible, at least 75% of the total compensation must be for services performed in the United States by actors, directors, producers, and other production personnel.
Click here for a more detailed explanation of this provision.
Click here for a list of frequently asked Questions and Answers about this provision
 NOTE: There are also some new regulations (TD 9312, published February 9, 2007) that require participations and residuals to be included in the $15 million production cap calculation. These are not explained here but information can be found at the IRS.GOV website.
 2. Section 199 – This new section of the IRS tax code provides for a 9% deduction for income from domestic production activities, when fully phased in. This deduction applies to multiple industries, not just the film and television industry. The amount of the credit is limited to the lesser of 9% of the net income generated by the domestic production or 50% of the taxpayer’s W-2 wages. For a production to be eligible, at least 50% of the total compensation for actors, productions personnel and others relating to the production of the film must be for services performed in the United States.
 Click here for a more detailed explanation of this provision.
3. Income Forecast Method Clarification – The law also clarified several issues relating to the income forecast method, the traditional method of expensing production costs.
