Arizona’s $125 Million Film and Television Tax Credit Bill Becomes Law

Arizona will hand out up to $125 million in tax breaks to Hollywood each year, joining the ranks of several states with nine-figure ceilings on incentive programs.

Under the program, which Gov. Doug Ducey authorized to be signed into law on Wednesday without his signature, productions filmed in Arizona will have a refundable tax credit of 15 to 20 percent of costs. Arizona’s film production schedule will start at $75 million in 2023 and grow to $125 million by 2025.

To qualify, producers must use an Arizona production facility or, if the project is primarily filmed on location, they must primarily film and conduct pre-production and post-production in the state. The program has a credit system: productions that spend less than $10 million will receive a 15% base tax credit and those that spend more than $35 million will receive a 20% credit. Projects with budgets between US$10 million and US$35 million can be compensated with incentives of up to 17.5% of their costs.

Manufacturing is also subject to a 2.5% increase in labor costs for hiring Arizona residents or if they are long-term (5 years) tenants of a qualified manufacturing facility. The resource, which spends $15 million in the state, could be subject to a tax break of 17.5 to 22.5 percent, depending on local residents hired to pay back at least $2.5 million.

While they are eligible for a $25 million tax credit, studios can receive a credit in the form of a cash refund if they exceed their tax liability.

“This is definitely a game-changer,” said Ryan Broussard, vice president of production sales and promotion at Media Services. “75 million dollars is gigantic.”

Lawmakers championing the program cited economic activity fueled by the New Mexico Film and Television Tax Incentive Program, which recently doubled its cap to $110 million. They wanted to take action.

In 2021, New Mexico recorded a record $624 million in spending on products like You better call Saul.. With refundable tax credits ranging from 25% to 35%, the state offers Hollywood one of the biggest tax breaks in the country. Netflix and NBCUniversal recently built production studios in New Mexico, costing $2 billion and $500 million, respectively, to produce content in the state.

Productions that don’t fit into the New Mexico schedule or can’t find space on stage can now choose to shoot in Arizona.

“They’re trying to be competitive with New Mexico, not just because their landscape is creatively competitive, but because New Mexico is so busy,” Broussard said. “There will definitely be an attack.”

The program partially reinstates a more limited movie tax credit the state had between 2005 and 2010. It was canceled after the Arizona Department of Commerce said the program caused a loss of $6.3 million in 2008.

Legislative analysts who reviewed the program found that the state will not see a return on its investment this time around. They noted that state productions such as local commercials that would have been filmed in Arizona regardless of the tax break are now eligible for a credit of at least 15%.

steven soderbergh parts movementall phillips The Hangover Part III and George Clooney Confessions of a Dangerous Mind Filmed in Arizona. However, productions are mostly filmed in other states with tax incentives.

“Over the last 20 years I’ve been here, we’ve had a lot of calls from major studios who wanted to shoot here, but due to lack of encouragement, they either moved quickly or came to us for a small part of a big part. project,” said Peter Catalot, director of Film Tuscon. “We’ve always been interested, but without the encouragement, we would never have made a full series or a feature film.” Now that we have them, we are sure that will change. “