Missouri Adopts Film Tax Credits
Jul 10, 2023 | Law Student Blog,
by Z’necia Hall, Saint Louis University School of Law, Juris Doctor Candidate, 2025
Film tax credits are tax incentives that allow filmmakers and video producers to offset production costs. The credit is essentially an amount of money that is subtracted from the taxes that one owes. Film tax incentive programs help the film industry to create the big blockbuster movies and binge-worthy shows that we all know and love.
The federal government does not have a blanket film tax incentive program. Instead, each state is left to decide if it is a program that it wants to offer. This is one reason we get certain hubs in the entertainment/film industry in certain places versus others.
Look at Georgia, for example. It is quickly becoming the new Hollywood as it continues to outproduce California in film and television production. This is in large part due to Georgia’s film tax incentive program, which offers a 20% tax credit with a minimum $500,000 expenditure threshold that can be met with one or more projects combined. The state also does not have a cap on the amount of tax credits that it can give. Its record is $1.2 billion in film tax credits given for the 2021 tax year.
Let us take note that Georgia is not the norm. California and New York set their program caps at $420 million. Other states set their caps around $100 million or less.
The states that create these programs justify them for the potential economic boost that the entertainment/film industry may create. It is a known fact that big productions create a lot of job opportunities. The entertainment/film industry also promotes tourism, which in turn stimulates the economy. Overall, the programs are meant to create a mutually beneficial relationship.
Ever wonder why certain films and television shows have stories that are set in one place yet filmed elsewhere? Tax credits are a big reason why; Take Ozark for example, a crime drama on Netflix. It was filmed in Georgia, yet the story occurs in Missouri. Production had to build locations that actually existed in Missouri just to film in Georgia where it financially made more sense.
Now Missouri is ready to re-enter the scene with its own tax credit. This has been years discussed since the last program expired in 2013. Currently, Missouri has an active entertainment/film scene that is ready to break out of its shell and attract bigger productions.
Missouri’s Show Mo Act is a film tax incentive program was passed by the state legislature in May and signed into law by the governor on July 6, 2023. This program provides a 20% tax credit for qualifying expenses. According to the Act, qualifying expenses are the total amount spent in Missouri by a production company in connection with qualified motion media production. The projects’ expected expenses must exceed $50,000 for works under thirty minutes in length and $100,000 for works over thirty minutes in length. There is also an opportunity to earn up to another 20% tax credit if certain prerequisites are met. For example, if one films more than 50% of the project in Missouri, that is an extra 5% tax credit. If one positively markets a tourist attraction, that is another 5% tax credit.
As this is a new program, the registration process has not been added to the appropriate websites. However, the act does make clear that the projects will have to be approved by Missouri’s Department of Economic Development and the Missouri Film Commission. With these new opportunities, maybe Missouri will become a new entertainment/film hub.
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