The Rhode Island Film Tax Credit, although a controversial law, is not unlike similar laws passed in over 30 States. The Rhode Island legislature recognized that the television and movie industries can generate an infusion of capital into the State and drafted the law to encourage production companies to seek out Rhode Island.... And with good reason. Rhode Island really is uniquely qualified for a number of various types of productions. We have a bustling downtown and financial district, a vast artist community, beaches, historical landmarks, Newport, etc. In addition to the capital that film and television productions bring into the State, we also benefit from increased publicity and tourism.
The Rhode Island Film Tax Credit has been a success in bringing on new productions, although many Rhode Islanders do not feel that it has been a sufficient economic success. Regardless, the tax credit remains and Rhode Island continues to encourage production companies to the State.
The Rhode Island Film Tax Credit offers a fully transferrable tax credit equal to 25% of the total production budget for state certified production costs incurred directly attributable to activity within the State. The credit also applies to staff salaries for actors, directors, etc who do not live in Rhode Island. The minimum budget to qualify for the credit is $300,000. So long as that budget is met, the film tax credit will generally apply regardless of the type of production: film, television show, commercial, music video, etc.
What makes the Rhode Island Film Tax Credit so desirable is that it is fully transferrable. This means that the credit can be sold to offset production expenses. Generally speaking, companies with a large Rhode Island tax bill are willing to pay 90-95% on the dollar for purchase of the tax credit. For these companies, they are still saving 5-10% of their total Rhode Island tax bill.
In another use of the tax credit, I recently worked on a film shot in Rhode Island by a Rhode Island production company, who took a loan out to finance production against the sale of the tax credit that they would eventually earn. This was a very creative way for an independent production company to help finance their motion picture.
If you are a production company looking to shoot in Rhode Island and seeking a local entertainment lawyer to assist you with the Rhode Island Film Tax Credit, please feel free to contact my office.
