(originally posted 12/11/2009 – updates coming soon…)
About Texas
Texas is one of the latest states to add a tax rebate program. Perhaps the most notable thing about Texas filmmaking is that it is a Right-to-Work state – simply put, you do not have to go Union here. This can result in more bang for your buck in wage payments and will save money on P&H fringes. That being said, most unions forbid their members from working on non-union projects – even in a right-to-work state. You may have to go union anyway.
The Program
The Texas program went into effect in April of 2009 and has several minimum requirements:
- Minimum qualified Texas spend of $250,000.
- 60% of principal photography must be completed in Texas.
- 70% of crew must be Texas Residents.
- 70% of cast (including extras) must be Texas residents.
- No cap on incentive rebate
Options
The incentive is broken in to main categories: (A) Total Qualified Texas Spend Rebate and (B) Texas Wages Rebate. You have to choose one or the other. Obviously, you want to explore both routes and pick the rebate that will rebate the most money. Finally, Texas provides additional rebate if filming in an “Underutilized Area”. For clarification, the percentages are shown in the table below (courtesy Texas Film Office):
| Qualified Texas Spend | Option A | Option A +\r\nUnderutilized Area | Option B (TX Wages) |
Option B + Underutilized Area |
| $ 250K – $ 1M | 5 % | 7.5 % | 8 % | 12.25 % |
| $ 1M – $ 5M | ||||
| $ 5M + | 15 % | 17.5 % | 25 % | 29.25 % |
Sales Tax Exemption
In addition to the rebate program, filmmakers are eligible to take part in the Sales Tax Exemption program. This results in 6.25% of state sales tax and 0.25 -2% local sales tax exemption which makes the above mentioned rebates even more attractive. Get the form from the Governor”s Office and simply present to vendors and sellers for instant tax savings.
Confused?
States have a method to their madness. They are not giving away money for the sake of filmmaking. They are trying to pump money into the local economy. Therefore, they have very specific requirements to ensure this is happening. It is important that you hire someone (like me!) who is able to navigate the qualified spend and calculations correctly. A mis-step could cost you hundreds of thousands.
