How does tax credits work
Illinois/Chicago has a 30% tax credit for shooting a movie there.
So if I was shooting a movie for $100,000, does that mean they give you $30k to shoot in Illinois?
Before you tell me to ask an accountant, I already did and he wasn't sure, so I figured I'd ask you fine people.
No, it doesn't mean they give you 30k. And, they have a minimum spend to qualify. Not sure about Chicago, but most places it's 500k-1m minimum in state spend to qualify.
As well, there are cash rebates, and then there are tax credits, very different. Cash rebate, like in NM, they cut you a check after you turn in your books and go through the audit.
Then you have a tax credit. This is a credit to be applied to in state taxes, so it can only be used by a business entity in state
with a state tax debt. Some tax credits are transferrable, and can be sold on the open market through a third party to a company that is looking for ways to decrease their in state taxes. This means that the credit will be discounted, and sell for anywhere from 75 to 85 cents on the dollar, and the the third party will take a commission.
As well, not everything in your budget will be "in state" spend including above the line that you may have to travel in (in Chicago you wouldn't need to bring in crew) but that can be a big chunk that you can't rebate.
So, while it's exciting to think that you can get 30% for shooting in Chicago, you won't. You may get 10-20% depending upon how efficiently you plan your production to maximize the credit, and how well you are able to utilize the credit.Source: messageboard.donedealpro.com