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State of Michigan Tax Incentives:
Production Incentives
Infrastructure Development Incentives
Financing Incentives
Workforce Development Incentives
Other Incentives
Production Incentives
40% Tax Rebate (refundable tax credit) for Michigan Production
- 40% refundable tax credit against Michigan Business Tax (MBT) liability for qualified film or digital media pre-production, production, and post-production costs incurred in Michigan. Alternatively could be claimed against Michigan income tax withholding tax liability.
- Refundable and assignable (transferable). This is a refund or tax rebate equal to 40% of qualified production expenditures, not a credit against taxes owed.
- Additional 2% credit in Core Communities.
- Rebate reduced to 30% for non-resident crew.
- Wages capped at $2 million per person per production.
- $50,000 minimum spend. No project cap. No annual cap. No sunset. [Amend Michigan Business Tax Act (HB 5841), General Sales Tax Act (HB 5842),and the Income Tax Act of 1967 (HB 5844)]
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Infrastructure Development Incentives
Film & Digital Media Infrastructure Investment Tax Credit
- Investment of $250,000 or more ($100,000 or more in 2008 only) in Michigan film or digital media production infrastructure (such as studios, equipment, or other facilities) eligible for a 25% tax credit against MBT liability.
- Credit is assignable or may be carried forward.
- Total credits allowed limited to $20 million annually.
- Credit reduced for brownfield credits claimed for same investment.
- Sunset on September 30, 2015. [Amend Michigan Business Tax Act (SB 1173)]
MEGA Eligibility for Film & Digital Media Production Companies
- Authorize film and digital media production companies to apply for and receive job creation tax credits issued by the Michigan Economic Growth Authority (MEGA) against MBT liability.
- Designate films and digital media as a high-technology activity eligible to receive tax credits issued by MEGA against MBT liability for high-technology job creation. [Amend Michigan Economic Growth Authority Act (SB 1174)]
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Financing Incentives
Film and Digital Media Investment Loans (available August 2008)
- Authorize the Michigan Strategic Fund to offer loans from the Jobs for Michigan Investment Fund (part of 21st Century Jobs Fund Program) for up to $15 million per qualifying film and digital media productions in Michigan.
- Loans can be 0% with backend participation by the Jobs for Michigan Investment Fund in lieu of interest.
Terms of loans are negotiated and production budget must be at least $2 million.
- A guarantor for the loan must be in place. Production must be wholly or substantially shot in Michigan.
- Qualified production company eligible for both loan and 40% production tax credit. [Amend Michigan Strategic Fund Act (HB 5848)]
Choose Michigan Film and Digital Media Production Loan Program
- Authorize a qualified production company to receive all or a portion of the value of discounted tax credits the company is eligible to receive in the form of a loan from the Jobs for Michigan Investment Fund approved by the Michigan Strategic Fund. Credits would be pledged for the repayment of the loan.
- Loans would be provided an interest rate of up to 2%.
Minimum loan amount would be $500,000.
- No loan would be greater than the discounted value of the tax incentives pledged.
- Production company would be responsible for loan repayment regardless of performance of primary tax incentive. [Amend Michigan Strategic Fund Act (also HB 5848)]
Capital Access Program for Film and Digital Media Producers
- Authorize film and digital media production companies to participate in the capital access program established by the Michigan Strategic Fund under the 21st Century Jobs Program.
- Participating banks throughout Michigan would offer CAP loans directly to production companies that need credit enhancement. Similar to a loan loss reserve fund, the bank, the production company, and the Michigan Strategic Fund pay a small premium into a reserve that makes it possible for the company to receive fixed asset and working capital financing in the form of a private loan from the bank. [Amend Michigan Strategic Fund Act (also HB 5848)]
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Workforce Development Incentives
Film & Digital Media Worker Job Training Tax Credit
- 50% MBT tax credit for expenditures incurred by an eligible production company to provide on-the-job training for Michigan residents in advanced below-the-line crew positions on qualified productions.
- Expenditures eligible for job training tax credit could not also be claimed for the 40% production tax credit.
- Sunset on September 30, 2015. [Amend Michigan Business Tax Act (SB 1176)
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Other Incentives
Free Use of State Property for Film and Digital Media Production
- Allow state departments and agencies to provide free use of state property for film and digital media productions. [Amend The Management and Budget Act (SB 1178), the Michigan Military Act (HB 5852), the Natural Resources and Environmental Protection Act (HB 5853)), and 1964 PA 286 (Transportation HB 5854)]
- Allow local governments to provide free use of local government property for film and digital media production
- Explicitly authorize local governments to provide free use of local government property for film and digital media productions. [Add New Act affecting local governments to Chapter 123 of the Michigan Compiled Laws (HB 5855)
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