Tax Credits
CPA support for state film and television production incentives, from tracking qualified spend during production to the independent expenditure examination many programs require.
Overview
Many states offer tax credits or rebates to attract film, television, and other media productions, and most of them tie the incentive to verified in-state spending. Before a credit is issued, programs commonly require an independent CPA to examine the production’s expenditures and report on which costs qualify. Pease Bell performs that work for production companies. We review cost reports, payroll, vendor invoices, and contracts against the program’s rules and prepare the CPA report the state agency uses to determine the credit.
In Ohio, for example, the Motion Picture Tax Credit statute requires a certified production to engage an independent CPA to examine its production, postproduction, and advertising expenditures and report to the Director of Development, and no credit is allowed until that report is reviewed. This page covers production incentives specifically. For research credits and other business tax credits, see our general tax credits services.
How We Help Productions Claim Incentives
CPA Expenditure Examination
We perform the independent examination of production spend that state incentive programs require, testing costs against program rules and issuing the CPA report submitted to the state agency.
Program Eligibility Review
Before cameras roll, we help productions understand how a state’s program treats residency, wages, vendors, and spending categories so the budget reflects what is likely to qualify.
Qualified Spend Tracking
We help set up coding and documentation practices during production so in-state and qualified costs are captured as they are incurred rather than rebuilt at wrap.
Payroll and Loan-Out Review
We review payroll records, fringe, and loan-out arrangements to support the wage portion of a claim and address documentation requirements some programs place on contractors.
Multi-State Comparison
For productions weighing locations, we help compare how different states’ incentives would apply to a planned budget, at the level of program structure and documentation demands.
Credit Transfer Support
Where a program allows credits to be transferred or sold, we help productions with the financial documentation and tax considerations involved in monetizing the credit.
Incentive Issues We Help Productions Address
- ✓Costs coded in ways that make qualified in-state spend hard to isolate
- ✓Missing invoices, contracts, or proof of payment at the time of examination
- ✓Uncertainty about how a program treats loan-outs, non-resident talent, or vendors
- ✓Delays in credit issuance caused by incomplete CPA reports
- ✓Confusion between production incentives and other business tax credits
Featured Insights
Frequently Asked Questions
Why do state film incentive programs require a CPA examination?
Most state film and TV incentives are based on how much a production spends in the state, so the state needs independent assurance that the claimed costs are real and eligible. Programs commonly require an independent CPA to examine production expenditures and report on qualified spend. The state agency then relies on that report, along with its own review, to determine the credit amount.
Does the Ohio Motion Picture Tax Credit require a CPA report?
Yes. Ohio’s statute requires a company with a certified tax credit-eligible production to engage an independent CPA to examine its production, postproduction, and advertising and promotion expenditures. The CPA reports to the company and to the Director of Development, and the credit is not allowed until that report has been reviewed. Program details can change, so productions should confirm current requirements with Ohio Film.
How is a film production tax credit different from other tax credits?
Production incentives are created by individual states to attract media production and are usually based on qualified in-state spending, wages, or both. Other business credits, such as the federal research credit under IRC Section 41, have different eligibility rules and calculations. A production may be eligible for both, but each is claimed and documented separately.
When should a production engage a CPA for incentive work?
Ideally before principal photography. Early involvement lets the CPA help set up cost coding, vendor documentation, and payroll reporting that match the program’s rules, which makes the final examination faster and reduces the risk of costs being disallowed. Productions that wait until wrap can still be examined, but rebuilding support after the fact takes longer.
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