Great States 2016for AdvertisingProduction Incentives

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State Production Incentives for Advertisers

States have expanded their Film Production Incentive Programs to entice commercial advertisers to shoot in their state. Production incentives come in the form of cash rebates or tax credits that can be converted into dollars.

LGdirect’s Incentive Division was created to give advertisers access to these funds. Our team, headed by Howie Markowitz, works with your agencies, cost consultants, and production companies to create a strategic plan for cost savings without sacrificing creativity.

Each state has unique requirements for filing the application, qualifying expenditures, and distributing funds. These requirements are nuanced and require strategic interpretation and application. LGdirect navigates this complex process for you and maximizes production dollars back to your brand.

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Contact Howie Markowitzh.markowitz@lgdirectco.com (323) 353-1900 d i rect(866) 696-5034 o f f ice

The 12 Best State Incentive Programs for Advertisers in 2016

LGdirect has identified the following state programs as being the most beneficial to Advertisers’ needs. The following serves as a guide to the top line benefits from each of these twelve states followed by a detailed side-by-side comparison chart.

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ColoradoConnecticutGeorgiaHawaiiIllinoisLouisianaMassachusettsMinnesotaOhioPuerto RicoTexasWashington

Colorado Sample Production CreditsThe Hateful 8

Furious 7 Identity Theft

The Lone Ranger

• 20% rebate on local Colorado expenditures andpayroll expenditures for work performed in Colorado,for both in state and out of state residents.

• Minimum spend for commercials is $250,000. If usinga Colorado based production company, the minimumspend is $100,000.

• Applications must be submitted prior to principalphotography.

• 50% of workforce must be Colorado residents.

20%Colorado Office of Film,Telev i s ion , & Mediawww.coloradofilm.org

• 10-30% on qualified expenditures.

• Minimum spend for commercials: $100,000.

• Applications can be filed after the start ofproduction.

• 50% of production days, or 50% of productionspend must occur in Connecticut.

• Celebrity wages are capped at $20 million.

• Production equipment purchased or rented out ofstate (i.e., New York) can qualify for the incentive.

• Both resident and nonresident crew and talentqualify.

• Incentive program is very favorable to celebritytalent.

30%Connecticut Office of Film, Television, and Digital Media

www.ctfilm.com

Connecticut Sample Production CreditsThe Opposite Sex

The TownThe Office

Georgia

20%Sample Production Credits

The Walking DeadThe Hunger Games

QuanticoAnt Man

ConstantineMagic Mike XXL

Georg ia F i lm , Mus ic , & Digital Entertainment Office

www.georgia.org/fmde

• Offering 20% on qualified expenditures and workperformed in Georgia.

• The minimum spend for commercials is $500,000.

• Crew and talent wages qualify for both in state andout of state residents qualify.

Hawaii

• Offering 20% on qualified expenditures on theisland of Oahu.

• Offering 25% on neighbor Hawaiian islands.

• Minimum spend for commercials is $200,000.

• Qualifying expenditures include cast and crewwages.

• Both Hawaiian residents and out of state residentsqualify.

• All production equipment and supplies purchased orrented in Hawaii will qualify.

• Travel that originates or ends in Hawaii will qualify.

Sample Production CreditsHawaii 5-0 (series)

AlohaThe Spongebob Movie: Sponge Out of Water

Pirates of the CaribbeanThe Descendants

Hawai i F i lm Of f i cewww.filmoffice.hawaii.gov

25%

I l l ino is

• Offering 30% on qualified production expenditures.

• IL resident crew wages qualify.

• IL resident talent sessions and residuals qualify.

• IL based production and post production expendituresqualify.

• The minimum spend for commercials is $50,000.

• Application must be filed a minimum of 24 hoursprior to filming.

Sample Production CreditsSpiderman 2Bridesmaids

Gone GirlTransformers

Batman Begins

30%Il l inois Film Officewww.illinoisfilm.biz

Louisiana

• Offering 30% on qualified expenditures, crew andtalent wages.

• Resident and Non-Resident crew and talent qualify.

• Offering 40% on crew and talent who are Louisianaresidents.

• The minimum spend for commercials is $300,000.

• Applicant must be a registered Louisiana company.

• Incentive program is very favorable to celebritytalent.

30%Sample Production Credits

Dawn of the Planet of the ApesMr. Right

Jurassic WorldAmerican Horror Story Freak Show

Astronaut Wives ClubPitch Perfect 2

NCIS New Orleans

www.louisianaentertainment.gov

Massachusetts

• Offering 25% on qualified expenditures.

• Minimum spend for commercials is $50,000.

• 50% of production spend, or 50% of principalphotography must take place in Massachusetts.

• Qualified expenditures include all productionsexpenses incurred in Massachusetts.

• Both in and out-of-state crew and talent wages qualify.

• Incentive program is very favorable to celebrity talent.

Sample Production CreditsTed 2

Olive KitteridgeThe Judge

American Hustle

25%Massachusetts Film Office

www.mafi lm.org

• “Snowbate” features a 20 to 25% cash rebate on qualifying production expenditures.

• Applications must be submitted prior to shoot.

• The minimum spend for commercials is $100,000.

• Out of state crew does not qualify.

• Out of state, above the line talent qualifies with a cap of $100,000.

• Airfares qualify for the incentive if booked through a Minnesota travel agent or a Minnesota based airline is used.

Minnesota

25%Sample Production Credits

FactotumDear White People

A Serious ManThe Big C

Minnesota Film and TV www.mnfi lmtv.org

The “Snowbate”

www.ohiofi lmoff ice.com

25%• Offering 25% on qualified in-state expenditures and

non-resident wages.

• 35% for Ohio resident wages.

• The minimum spend for commercials is $300,000.

• Qualified expenditures includes equipment, travel, and post production.

Ohio Fun Fact: Ohio is 41% less expensive than the

Los Angeles region, and over 50% less expensive than Manhattan.

40%Puerto Rico

• Offering 40% on payments to Puerto Rican residents, crew and production companies.

• Offering 20% on payments to non-resident crew.

• The minimum spend for commercials is $100,000.

• Applicants must obtain a Pre-Application Conference Letter prior to production.

• Must submit an application prior to the completion of shoot.

• $50 million annual program cap. www.puertoricofilm.com

Sample Production CreditsMarvel Agents of Shield

Our Brand is CrisisRoyal Pains (series)

22 Jump StreetFast and Furious

www.gov.texas.gov/film

5%Texas

• Texas features a grant program of 5%-10%:

5% for commercials with qualified spend under a $1 million;

10% for productions with qualified spend over $1 million.

• Additional 2.5% for productions shooting in “underutilized or economically distressed areas”

• Funding is based on a 2 year budget. Must check for available funding prior to production.

• The minimum spend for commercials is $100,000.

• Must submit applications art least 5 days prior to start of production.

• 70% of combined crew and cast must be Texas residents.

• 60% of principal photography must take place in Texas.

Sample Production Credits Boyhood

No Country for Old MenSpy Kids

Cast Away

washingtonfilmworks.org

• Offering a 25% rebate on qualified Washington expenditures.

• Minimum spend for commercials is $150,000.

• Applications must submit prior to production.

• If production employs 85% of Washington resident labor wages, 15% of non-resident labor wages will qualify.

• Annual program cap of $3.5 million.

Washington

25%Sample Production Credits “Z” Nation

LaggiesTwilight Saga “Eclipse”

Shop Girl

Colorado Connecticut Georgia Hawaii Illinois Louisiana

Incentive Applied topayroll and expenses 20% 10% - 15% - 30% 20% 20%, 25% 30% 30%

Per Project Cap None None None $15,000,000 None $30,000,000*

Annual State Allocation $5,000,000 None $12,500,000 None None $180,000,000*

Minimum Spend$100,000 CO company,

$250,000 all others $100,000.-$1,000,000. $500,000 $200,000 $50,000 $300,000

Qualified EmployeesResidents and non-

residentsResidents and non-

residentsResidents and non-

residentsResidents and non-

residents Residents onlyResidents and non-

residents

Salary Cap $1,000,000 $20M aggregate$500,000 for W2; No cap

1099 none $100,000$3,000,000; No cap for

loan-outs

Can Loan Out Qualify? Yes Yes Yes Yes Yes Yes

CPA Audit Required? Yes Yes No, but recommended Yes Yes Yes

Special requirements andrestrictions to receive

incentive:

50% of workforce must beCO residents

Spend min. of 50% ofproduction days in CT

Airfare will qualify ifpurchased through aGeorgia based travel

agency.

A “reasonable” effortmust be made to hirelocal crew and talent.

Must provide evidence offinancial, educational, or

workforce development inHawaiian film industry

Production mustdemonstrate an effort to

hire “diverse” crew.Production must provide a

“competitive needs”statement demonstratingwhy the Illinois Film Tax

Credit is essential inchoosing Illinois as

location.

Louisiana requiresplacement of state logo

on production, orproductions website orsocial media profile (i.e.

facebook, instagram,twitter, youtube)

URL/Website www.coloradofilm.org www.ctfilm.com www.georgia.org/fmde www.filmoffice.hawaii.gov www.illinoisfilm.biz www.louisianaentertainment.gov

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State Production Incentive Details

Massachusetts Minnesota Ohio Puerto Rico Texas Washington

Incentive Applied topayroll and expenses 25% 20%, 25% 25%, 35%

40%, 20% non residentcast& crew 5%, 10%, 12.5% 15%-25%

Per Project Cap None $5,000,000 $5,000,000 None Unlimited Unlimited

Annual State Allocation None $10,000,000 $20,000,000 $50,000,000 $32,000,000 biennial $3,500,000

Minimum Spend $50,000$100,000 (minusProduction Fee) $300,000 $100,000 $100,000 $150,000

Qualified EmployeesResidents and non-

residentsResidents and non-

residentsResidents and non-

residentsResident and non-

residents Resident only

Resident and non-resident (if resident labor

is 85%+)

Salary Cap $1,000,000Non-resident ATL talent

100K in credit No None $1,000,000 Non-Residents $50,000+

Can Loan Out Qualify? Yes Yes Yes Yes Yes Yes

CPA Audit Required? YesOn production over

$1,000,000 CPA required Yes YesIf receiving more than

$300,000 No

Special requirements andrestrictions to receive

incentive:

50% of production spend,or 50% of principal

photography must takeplace in Massachusetts

At completion projectsmust complete the

“Snowbate ExpenditureReport.”

The application fee is .5%of the estimated taxcredit with a cap of

$10,000. Applicationsmust include budget,

storyboards, "taxdisclosure" form, and

documentation offinancial ability to

complete the project.

50% of principalphotography must take

place in Puerto Rico

60% of principalphotography must takeplace in TX. 70% of cast

and crew must be TXresident.

Completion Package mustbe filed within 45 days ofcompletion of production

URL/Website www.mafilm.org www.mnfilmtv.org www.ohiofilmoffice.com www.puertoricofilm.org www.texas.gov/film www.washingtonfilmworks.org

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State Production Incentive Details

Contact Howie Markowitzh.markowitz@lgdirectco.com (323) 353-1900 d i rect(866) 696-5034 o f f ice

directCurrently, there are 32 states with production incentive programs. States are constantly enacting new legislation, unlocking new opportunities for commercial production across the nation. We work with states on tailoring their legislation in order to fit the needs of advertisers and their agencies.

The twelve states featured in this guide were selectedtaking into account not only the monetary return, but also on the depth of crew, availability of equipment, studios, and talent pool. These twelve states are home to some of the largest production assets in the nation.

Contact LGdirect for a rebate quote on your next production.