What are Georgia Film Credits and how do they work?

Georgia film credits are allocated through the Georgia Department of Revenue as a way to incentivize studio production companies to film in Georgia. These companies get a 20% credit on certain expenses. These credits are transferable and most of these companies do not need all the film credits. They then sell the credits to brokers which facilitate the transfer of the credits to individuals and businesses to utilize.

How much do they cost?

Film credits can typically be purchased for around .90 to .92 on the dollar. Essentially, you would pay the film credit broker $9k for $10k in Georgia tax credits, saving you the $1k difference.

How safe are film credits?

We always recommend purchasing Georgia Department of Revenue audited credits. They have already been approved by the state and have very little risk.

What are the best ways to utilize?

There are a number of different strategies to utilize film credits. Most common are below:

1. Lower state withholdings/estimated payments and purchase film credits instead. This strategy would involve strategically not paying estimates or withholdings and instead buying film credits.
2. Waiting until tax time to calculate the entire state tax liability amount. This strategy would involve completing the tax return to calculate the exact amount of film credits to purchase to maximize tax savings. This can be a bit risky, as supply of these film credits is often slim come tax filing time.
3. Purchase film credits for past due taxes. If there is a tax liability from previous tax years, the purchase of film credits from those years can eliminate penalties and interest.

Conclusion

Film credits can be a great strategy to lower your Georgia tax bill by approximately 10%. If you have any questions or are interested in purchasing film credits, feel free to reach out to us!