Private Money and Soft Money Financing : Michigan

Michigan’s film incentive, officially called the “film production credit,” is a refundable, assignable tax credit which is open to any production incurring $50,000 or more in local expenses while shooting in-state.  Forty percent of production expenses and Michigan crew and above-the-line salaries, and 30% of out-of-state below-the-line crew wages are eligible for the transferable tax credit, with an extra 2% also available for expenses in one of 103 designated “core communities.”  Concerning crew members, the state of Michigan takes competence into account when calculating the credit.  On one hand, “above the line personnel,” such as producers, directors, writers, and actors are included in the direct production expenditures and are eligible for the 40-42% tax credit.  On the other hand, “below the line personnel, “ such as technical crew members, may be either “qualified personnel expenditures” eligible for the 30% credit amount, or “direct production expenditures” eligible for the40-42% credit if they were Michigan residents for at least 60 days before approval of the agreement between the production company and the Michigan Film Office.  Total payments to any one employee are capped for purposes of the credit at $2 million regardless of whether the employee is a Michigan resident or not.  Loan-out companies can qualify for the credit provided they pay the 4.35% Michigan state income tax or if it is withheld.  There is presently no annual or per-project cap.