Under Rhode Island General Laws, the ‘Motion Picture Production Tax Credits’ program is meant to encourage development of a capital base for feature length films, documentary productions, videos, commercials and television series in Rhode Island. The program was put in place to achieve a more independent, self-supporting industry.
A similar program exists under the Rhode Island General Laws for ‘Musical and Theatrical Production Tax Credits’.
In order to be eligible for the program’s tax credits it must meet the following criteria:
- The motion picture production must be approved by the RI Film & TV Office and produced by a motion picture production company registered in RI. The company does not need to own or control the copyright or distribution rights, as long as they have either a signed, viable distribution plan, or they are producing the production for a major motion picture distributor, major theatrical exhibitor, or television network/cable television programmer.
- At least 51% of the film/television production/principal photography must take place in Rhode Island or at least 51% of their final production budget is spent and at least 5 individuals are employed during the production in the State, and A minimum of $100,000 needs to be spent on the ground in Rhode Island.
- Productions costing at least $10M in qualifying expenditures over a 12 month period are allowed to waive the 51% film/television production/principal photography requirement.
- For Documentaries, the location of at least 51% of the total production days, including pre- and post-production, must take place in Rhode Island.
Program qualifiers may receive a tax credit which can be applied against the Rhode Island corporate income tax, bank excise tax, insurance company gross premiums tax, or the personal income tax.
What is the available credit limit?
- The total motion picture tax credits (and/or musical and theatrical production tax credits) issued cannot exceed $30 million. This new law applies solely for the 2022 tax year. Under the previous law, the maximum allowed for motion picture tax credits and/or musical and theatrical production tax credits was $20 million.
- The motion picture tax credit is 30% of the state certified production costs incurred in Rhode Island activity and limited to $7M. The $7M tax credit limitation can be waived by the tax administrator for any feature-length film/television series up to the remaining funds available.
To begin the process, a company must submit a completed application, along with supplemental material, as requested by the RI Film & TV Office.
The sunset remains the same and no credits can be issued on/after July 1, 2027. The only exception is if the production receives initial certification prior to the sunset date.
The credit can be transferred or sold before it is applied to any tax liability.
An independent, certified public accountant licensed in RI must certify the audit and render an opinion. The RI Division of Taxation will then conduct their own, independent audit. Piccerelli, Gilstein & Co., LLP has provided several companies with this requirement assistance. For more information visit the Rhode Island Film & Television Office or contact Doryanne Hamel at 401-831-0200.