ENACTED LEGISLATION (Signed by the Governor)

MAINE
On February 23, 2010, Governor Baldacci signed a bill that enacts a 5% nontransferable tax credit on all qualified production expenses as well as a rebate program for wages that provides a reimbursement equal to 12% of the 1st $50,000 paid to each Maine resident and 10% of the 1st $50,000 paid to each nonresident. To qualify for the tax credit program the production must demonstrate that it is fully financed and that at least $75,000 will be spent.  On-screen credit is required for any production using the program.

ARIZONA
Arizona has introduced two bills which together could potentially yield a refundable tax credit of up to 40% of qualified production expenses.  If passed, the first bill would create a 20% refundable tax credit for productions incurring at least 75% of the total qualified production costs in Arizona.  Other requirements for this particular incentive substantially mirror the existing incentive program (which is scheduled to sunset on 12/31/2010) with the exception that the proposed bill adds a per project credit cap of $20 million.  The proposed program also extends the sunset date to 12/31/2015.  The second bill provides for an additional refundable tax credit ranging from 5% to 20% of qualified production expenditures if shot in a qualified production facility.  To qualify for this program the production must have qualified production expenditures of at least $100,000; produce 50% of all principal photography and postproduction within a privately funded production facility; and, conduct at least 80% of principal photography and post production in Arizona.  The amount of the refundable credit is based on the certified infrastructure investment of a privately funded production facility.  Generally, for the production to earn the additional 20% it must shoot in a facility costing at least $75 million; to earn an additional 15% the studio must have cost at least $50 million but less than $75 million; and, to earn an additional 5% the facility cost must have been at least $20 million but less than $50 million.  In addition to the other costs that qualify for this bump, only 10% of resident labor may be included as qualified production expenditure. 

CONNECTICUT
Connecticut has introduced a bill to change the existing incentive program from a tax credit to a nontransferable tax rebate program. To be considered an eligible production company at least 50% of its total production must be conducted in studios in Connecticut.  The requirement that 50% of principal photography days be within Connecticut or at least 50% of post production costs be incurred within Connecticut have been removed along with all language relating to transferring or assigning the credit.  Otherwise, most of the language from the existing program has been carried forward. 

MARYLAND
Maryland has introduced two similar bills.  Each would repeal the current rebate program.  The only difference between the two bills is that one provides for a 28% refundable tax credit and the other bill provides for a 30% refundable tax credit (up from the current 25%) on all direct costs associated with a production. Direct costs include employee wages and benefits, fees for services, costs for acquiring or leasing property and any other expense necessary to carry out a film production activity. Direct costs will not include any portion of the wages of an employee whose salary, wages or other compensation are over $1 million. The minimum instate spend to qualify remains at $500,000. If enacted, the new program will go into effect on July 1, 2010 and will be applicable to all tax years beginning after December 31, 2009.

NEW MEXICO
A recent bill introduced in New Mexico would provide a tax credit limit of $2 million per project on all qualified production expenditures and a $2 million per project credit cap on postproduction expenditures.  Also, language has been added to further define a New Mexico resident as a person who has been a New Mexico resident for at least the previous six months. In the past, "time as a resident" was not a determining factor for their wage payments, fringes and fees to qualify as direct production expenditures.  Because of the proposed $2 million per project cap, the $5 million credit limit on services rendered by all performing artists is no longer necessary and, as such, has been deleted.  
 
NEW MEXICO
In a separately introduced bill New Mexico sets statewide limits on the current film incentive program. The aggregate amount of tax credits approved is not to exceed $50 million in any fiscal year. Once the limit is reached, all unprocessed applications for credit will be carried forward to the next fiscal year, and processed in the order in which the New Mexico film division received before new applications are processed.  Under this proposal, all other provisions of the existing incentive program would remain unchanged.

MASSACHUSETTS
As of February 18, 2010, the Massachusetts DOR will no longer grant Waivers of Withholding for payments made to loan out companies or to independent contractors for services provided to a production company that qualifies and submits an application for the motion picture production credit.  CLICK HERE for the MA DOR Emergency Bulletin.