Tax Incentives

Massachusetts: The Best Film Tax Credit In The Country

The Massachusetts Film Tax Credit has been dramatically upgraded. Since 2006, The Walt Disney Company has shot four major features here. Columbia Pictures has shot three. Paramount Pictures just finished shooting a major production here, with another on deck. All in all, 25 major productions have shot in Massachusetts in only three years.

Why so much action in Massachusetts all of a sudden? Because under our new law, studios, major producers and filmmakers–who either shoot at least half of their movie or spend at least half of their production budget in the Commonwealth–are eligible for a tax credit equal to 25 cents for every new dollar of spending they bring to Massachusetts. No caps. No limits. No pre-authorization. No pre-certification. No lines. No waiting. No muss. No fuss.

That’s not all. Beginning with the start of pre-production and continuing for a period of 12 months, filmmakers will be eligible for 100% sales tax exemption on any production related items purchased in the state. Massachusetts is also the only state in the country that allows filmmakers to take their credits either as a direct rebate at 90% of the face value (guaranteed), or to sell them at market rate—whichever is more favorable.

And finally, this credit is not just for big Hollywood moguls. With the spending threshold lowered to $50,000 and with “digital media projects” now eligible, Massachusetts has extended the benefits of the film tax credit to thousands of locally based, small independent and documentary filmmakers — key elements of our ever-expanding Creative Economy.

If you have a specific tax credit question that is not addressed in any of these links, you may send an email directly to the Department of Revenue (rulesandregsatdor [dot] state [dot] ma [dot] us) or contact: Click to go to "MA Film Office":http://mafilm.org website John Lordan, Supervisor Phone: 617-887-6725 Fax: 617-887-6792 E-mail: lordanatdor [dot] state [dot] ma [dot] us

Summary of Massachusetts Tax Incentive for the Motion Picture Industry

Three types of tax exemptions/credits available to motion picture production
companies that produce motion pictures in MA:

  1. Sales & Use Tax Exemption
  2. Transferable 25% Payroll Credit
  3. Transferable 25% Production Expense Credit

Definition of key terms, or, Who and What is Eligible:

  • Motion Picture
  • Motion Picture Company
  • Production Expense/Costs

What is a Motion Picture?

  • Feature length film, video, or digital media project (narrative or documentary).
  • TV series (a season not to exceed 27 episodes).
  • Commercial (A single commercial or a series of commercials for one client with production expenses over $50k in a consecutive 12 month period). All must be made in MA, in whole or in part, for theatrical or television viewing or as a television pilot.

What is not a Motion Picture?

  • Productions featuring news, current events, weather and financial market reports, talk show, game show, sporting events, awards show, or gala event
  • Productions whose sole purpose is fundraising
  • Long‐form production that primarily markets a product or service
  • Production containing obscene material or performances

What is a Motion Picture Production Company?

A company, including any subsidiaries engaged in the business of producing motion pictures, videos, television series, or commercials intended for theatrical release or for television viewing.

What is a Production Expense?

Preproduction, production, and post production expenses directly incurred in the production of a motion picture including:

  • Wages and salaries
  • Costs for: set construction/operations, photography, lighting, sound, editing, wardrobe, make‐up, film processing, transfer, sound mixing, special & visual effects, music, location fees, purchase or rental of facilities and equipment
  • Any other production expense determined to be eligible by the DOR

1. Sales Tax Exemptions

Who is eligible:

  • Production company that spends at least $50,000 in total production costs in MA during a consecutive 12 month period
  • Accredited film school students

What the sales tax exemption is applied to:

  • Production costs incurred in MA

2. 25% Payroll Tax Credit

Who is eligible:

  • Production company that spends at least $50,000 in production costs on a motion picture in MA during a consecutive 12 month period

What the 25% is applied to:

  • Aggregate payroll of a motion picture that is subject to MA personal income tax withholding
  • Aggregate payroll does NOT include payments to an employee when total payments are $1m or more (“High Salary Employee”)

3. 25% Production Expense Credit

Who is eligible:

  • Production company that spends at least $50,000 in production costs on a motion picture in MA during a consecutive 12 month period
  • AND one of the two:
  • Production company that spends more than 50% of a motion picture’s total production expenses in MA OR Shoots more than 50% of a motion picture’s principal photography in MA

What the 25% is applied to:

  • Massachusetts production expenses
  1. Excludes aggregate payroll expenses applied to the payroll credit
  2. Includes payroll of “High Salary Employees” not applied in the payroll credit


Other Key Elements

  • The law took effect 1/1/07 and expires on 1/1/2023
  • Tax liability is credited to the company’s personal income or corporate excise tax liability
  • Tax credits may be transferred OR the credits may be refunded by the state for 90% of their value.
  • If transferred, tax credits can be carried forward 5 years


For further information go to: http://www.dor.state.ma.us/business/filmcredit.htm