Five Tax Tips for Atlanta Production Companies | Fricke & Associates CPA

Five Tax Tips for Atlanta Production Companies

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Five Tax Tips for Atlanta Production Companies

Atlanta Movie Industry Tax Tips

Atlanta Movie Industry Tax TipsGeorgia is rapidly becoming the filmmaking capital of the south. This is exciting news for peach state residents who welcome the influx of jobs and economic growth to the region.

Driving this good news is the Georgia Entertainment Industry Investment Act, which provides a tax credit of up to 30% for qualifying productions. This cuts costs without sacrificing quality, making Georgia an attractive place to produce movies, television shows, commercials, and other content.

While this is a great time to be a filmmaker in the peach state, to reap the full benefits of this incentive, there are certain things to keep in mind.

Tax Tips

 

  •  In order to take advantage of the Georgia Film Tax Credit, a production company must spend $500,000 or more on a single project, or on multiple projects during the fiscal year. Keep meticulous records of your expenditures, as these tax credits are worth up to 30% of your spending. This adds up quickly.
  •  To receive the full 30% tax credit, the final approved product must have the Georgia logo embedded into it. This is key; without the logo, your company can only obtain a 20% credit. For example, if you have filmed a television commercial for a company, and they do not want the logo embedded in it, then you can only obtain a 20% tax credit. This happens more commonly than you think, so each production’s records must be kept separate if your studio produces content for different companies.
  • If your studio is filming for another company, like in the case of a television commercial, the company that contracted you to film that commercial is the one who gets the tax credits. A smart producer will negotiate for a portion of those credits. Since your production company is in possession of personal information, such as social security numbers, addresses, and other privacy related materials related to employees and independent contractors, you are in a good position to negotiate.
  • When booking airfare and hotel rooms, scoring music for your production, purchasing or renting vehicles, and purchasing insurance, be sure that all of it is done with Georgia-based firms. If not, these expenditures will not qualify for the the tax credit. Again, accurate record keeping is a must.
  • Labor costs are important. There is a $500,000 cap for employees paid with a W-2 when adding their salaries to production costs. Independent contractors and loan-outs are exempt from this cap, so keep this in mind when planning your budgets.

 

We have experience working with Georgia businesses, including production companies of all sizes. For more advice, contact us today. We would be happy to assist you.

William T. Fricke
William T. Fricke
Since 1999 William Fricke has served as the Firm’s managing partner and provides accounting, audit, tax and consulting services to commercial, government, and nonprofit clients. Prior to becoming managing partner of Fricke & Associates, P.C., he worked for over 20 years as a small business and individual client services partner and as the partner-in-charge of the governmental and nonprofit practice sections of the firm of Metcalf Rice Fricke & Davis.