This chart provides general information about film production incentives. For specific requirements, see link to Department of Revenue (DOR) directives and forms. Massachusetts General Laws and DOR directives prevail over information presented here.
|General Eligibility Requirements||Eligible: Feature-length film, video, digital media project, a TV series with a maximum of 27 episodes, a commercial for theatrical or TV viewing or as a TV pilot. Multiple episodes of a TV series or multiple commercials for the same client may be aggregated to qualify.
Ineligible: news, current events, weather and financial market reports; talk show; game show; sporting events; awards show or other gala event; fundraising production; long form production marketing product or service; corporate training and in-house corporate advertising; video games; a production containing obscene material or performance.
Minimum spend: motion picture production company must spend $50,000 or more in Massachusetts qualifying costs during a consecutive 12-month qualifying period. The 12-month qualifying period must be the same for sales tax exemption and tax credits. The qualifying period can cross taxable years.
|Residency Requirements||There are no residency requirements for vendors, crew, actors, etc.|
|Film Students||Students from accredited film schools are eligible for a sales tax exemption for production expenses. There is no requirement that an accredited film school student must also expend at least $50,000.|
|Applying for Incentives||Incentive Apply to DOR|
Sales tax exemption Prior to production
25% payroll credit Post Massachusetts production
25% production credit Post Massachusetts production
See specific application details below
|Sales Tax Exemption||Eligible: Production expenses including meals. Ineligible: Room occupancy taxes, taxes related to equipment purchases, fuel tax.|
|Additional Eligibility Requirements||Production company’s production expenses in Massachusetts, during the qualifying period, must exceed 50% of all production expenses for the project. (Production expenses for this purpose include all qualifying payroll expenses.)|
At least 50%* of the production company’s total principal photography days, exclusive of pre- or post-production, must take place in Massachusetts.
*As of January 1, 2022, this will increase to 75%, details to follow.
|Application||Complete STE form and file with Massachusetts Department of Revenue prior to start of production. Form requires estimated Massachusetts and non-Massachusetts budgets and shoot days and the consecutive 12-month eligibility period for credits and tax exemptions. After conditional pre-approval, production company provides vendors with exempt use certificate. Vendors may also require a copy of DOR’s approval letter. STE form may be emailed to email@example.com. Approval time is normally 3-5 business days. |
|Payroll Credit||25% of qualifying aggregate payroll|
|Qualifying payroll||Payments that constitute Massachusetts source income to the recipient. Fringe benefits apply if included in Massachusetts source income to the recipient.|
|Tax Withholding||Production company and/or payroll services company must be registered with the Department of Revenue for withholding of personal income tax. 5.05%(as of 1.1.19) personal income tax must be withheld to qualify for the credit.|
|Loan Outs||Payments to Loan-Outs qualify for the payroll credit. Personal income tax must be withheld and the production company must file a Loan-Out Affidavit/Allocation Form for each Loan-Out with the credit application. (LOAN OUT GUIDE)|
|High Salary Employee||Entire salary of any employee whose total payments in connection with the production are $1 million or greater is excluded from the qualifying aggregate payroll but is eligible for the production credit.|
|Production Credit||25% of production and pre- and post- postproduction expenses directly related to the Massachusetts production. Equipment or other tangible personal property rented or purchased outside of Massachusetts qualifies as production expenses. For purchases of equipment or personal property, the qualifying cost is depreciation cost, not purchase price.
Exclusions include: qualifying payroll included in payroll credit, payroll services fees, loan fees, interest expenses, completion bond expenses, rights and script fees, production insurance expenses, accounting and audit expenses, legal expenses, marketing and advertising, costs/licensing fees for stock footage and archival materials, travel/shipping to and from Massachusetts, overhead expenses, and wrap parties. Other exclusions may apply.
|Additional Eligibility Requirements||Qualifying Massachusetts payroll and production expenses during a consecutive 12-month period must exceed 50% of the total project budget.|
At least 50% of the production company’s total principal photography days, exclusive of pre- or post-production, must take place in Massachusetts.
|High Salary Employees||Qualifying salaries of High Salary Employees ($1 million or greater) may be included in calculating the Massachusetts production expense, providing that 5.05% (as of 1.1.19) personal income tax is withheld.|
|Employer-paid Payroll Expenses||Employer-paid expenses, such as FICA, health insurance, pension contributions, are considered production expenses.|
|Financial Documentation||Documentation of expenses for goods and services must include the vendor name and address for each purchase, including petty cash transactions.|
|Payroll & Production Credit Application||The credit application is filed after all the Massachusetts production is completed, all vendors are paid, and an audit/AUP, if required, is completed. Only one application can be filed for each project.|
|Use of Payroll & Production Credits||Tax Liabilities|
Apply credits to tax liabilities. Unused credits may be carried forward for up to 5 taxable years.
Production companies are not permitted to transfer part of a credit and request a refund of the remainder.
|Audit Requirements||Film credit applications that are submitted with $250,000 or more of qualified film credit expenses must include an audit or an Independent Accountant’s Report on Applying Agreed Upon Procedures (“AUP”). The audit or AUP must be performed by a Massachusetts CPA. The financial period covered by the audit or AUP must match the qualifying period start and end dates specified in the credit application, Form FP. Productions with less than $250,000 of qualified film credit expenses may choose to include the AUP or an Audit with their film credit applications, but it is not required.
Agreed Upon Procedures Form
|Business Registration||Production companies and loan-outs that are not domiciled in Massachusetts must register to do business in Massachusetts with the Secretary of the Commonwealth.|
Foreign LLC instructions and registration form
Foreign Corporation instructions and registration form
|940 Unemployment Tax Certification||All credit applications must include a copy of the 940 Certification that verifies the production company and/or the payroll company has paid the requisite unemployment taxes. The 940 Certification is generated from the company’s online UI account.|
The 940 Certification must include all the production company’s Massachusetts payroll, not just payroll associated with the specific film project. In some cases, that will require a 940 Certification from the payroll services company, if applicable, and a 940 Certification from the production company.
Questions? Contact Enforcement Staff at (617) 626-5770.
|Department of Revenue Contacts & Forms||Massachusetts Department of Revenue|
Film Credit Unit
200 Arlington Street, Room 4300
Chelsea, MA 02150
|FAQs||Please visit our Frequently Asked Questions (FAQs) for general questions and answers regarding the Incentive Program.
|Massachusetts Film Office Contacts|
MFO Director & Production Incentives
Film Office Administration