Q: What is the process for getting a film incentive through the State of Utah?
A: The process of applying for a film incentive along with deadline dates can be found here.
Q: Where can I find the corresponding legislation for the Motion Picture Incentive Program
A: House Bill 99S01 can be found on the Utah State Legislature webpage
Q: What is the function and purpose of the C.P.A.?
A: The CPA is to perform an examination level attestation complete with an audit of the requested ‘dollars left in the state’ submitted for the tax credit or rebate. The CPA shall review the motion picture company’s report identifying and documenting the ‘Dollars left in the state’ by the motion picture company for its state approved production. Provide an examination report and opinion letter on the motion picture company’s schedule of ‘dollars left in the state’.
The sources for the CPA Attest Engagement standards is the America Institute of Certified Public Accounts Statements on Standards for Attestation Engagements (SSAEs), Attestation Engagements section 101, SSAE No. 10, SSAE No. 11, SSAE No. 12 and SSAE No. 14.
Q: What qualifies as ‘Dollars Left in State?
A: A qualified Utah expense is a production expense that is subject to Utah taxes. All goods and services must be domiciled and used in Utah and are directly attributable to the physical production of the feature film or television program. Money that is spent outside of Utah or expenditures that are indirect or not production related do not qualify for the cash rebate or tax credit.
Dollars left in the state means expenditures made in the State for a state-approved production, including:
1) An expenditure that is subject to State of Utah:
a) Corporate franchise or income tax under Title 59, Chapter 7, Corporate Franchise and Income Taxes;
b) Individual income tax under Title 59, Chapter 10, Individual Income Tax Act; and
c) Sales and use tax under Title 59, Chapter 12, Sales and Use Tax Act, notwithstanding any sales and use tax exemption allowed by law;
2) Payments made to a nonresident only to the extent of the income tax paid to the state on the payments, the amount of per diems paid, and other direct reimbursements transacted in the state;
3) Payments made to a payroll company or loan-out corporation that is registered to do business in the state, only to the extent of the amount of withholding under Section 59-10-402.
A) Utah Residents – Eligible Payroll Expenses:
1) Gross Wages
2) State of Utah Per Diem
3) Employer Payroll Taxes
i) Social Security (FICA)
iii) Federal Unemployment Tax (FUTA)
iv) State of Utah Unemployment Tax (paid to the Utah Department of Workforces
4) Box Rental
B) Utah Non-Residents – Eligible Payroll Expenses:
1) State Of Utah Wage Withholding
2) State of Utah Per Diem
3) State of Utah Unemployment Taxes (paid to the Utah Department of Workforces Services.)
C) Utah Non-Residents – Ineligible Expenses:
1) Gross Wages
2) Employer Payroll Taxes
i) Social Security
iii) Federal Unemployment Tax
D) Other Payroll Expenses, such as Workers Compensation Insurance and Payroll Handling Fees are eligible if the company paid is a qualified State of Utah Company.
Expenses with partial qualification as ‘Dollars Left in State.
Shipping, airline and phone expenses that have at least one destination point in Utah are eligible up to 50% of the expense.
Q: What is a ‘Qualified Utah Business/Company?
A: A “Qualified Utah Business/Company” is legally able and in good standing to do business in Utah, has a Utah presence and employs Utah residents. The company cannot be a pass thru company. If the company is a Utah company but appears to be a pass-thru company, then only those dollars that are of benefit to Utah will be allowed for the Utah MPIF incentive. For example, The Big Screen Production Company (BIG) pays Utah Film Company (UtFC) to broker equipment and supplies for a film production. The UtFC finds equipment to lease from California Acting Stages (CaAS) in California for a $45,000 leasing fee. UtFC charges BIG equipment $50,000 for equipment from CaAS and $7,000 for
supplies bought in Utah and a $1,000 fee totaling $58,000. The $7,000 supplies, $5,000 up charge ($50,000 less $45,000) and $1,000 fee totaling $13,000 is eligible as “Utah Spend”.
Q: What is a ‘Utah Resident?
A: A “Utah Resident” has lived in Utah for the entire year, even if temporarily outside of Utah for an extended length of time (years in certain situations); or maintains a permanent home in Utah, even if you lived outside Utah, and spent a total of 183 or more days of the taxable year in Utah; and is required to pay tax income in the State of Utah.
Q: What is a ‘State Approved Production?
A: “State-approved production” means a motion picture, television series, or made-for-television movie approved by the administrator and ratified by the board that is produced in the state by a motion picture company.
Q: Does Financing or Banking Expenses Qualify for an MPIP Rebate?
A: Yes, but only if the Bank is a Utah Chartered Bank. The loan origination fee, or financing fees and interest expense can be included as “Utah Spend”. However, the legal, documentation and other financing fees do not qualify. These fees are pass thru fees and the company or entity that ultimately performed the service also needs to be a qualified Utah business.
Q: Qualified Vehicle Expenditure Policy
A: Rentals, leases and purchases of vehicles registered and licensed in the state of Utah are eligible expenditures that are scripted in the finished feature film or television program; however, the purchase of a vehicle for short-term use of a member of the film crew or cast while the project is filming in Utah is not appropriate and is not a qualified expenditure. The rental of a vehicle for the use by crew or cast member during the Utah production is a qualified expenditure, if the rental is directly related to the project.
Q: Can I count any expenses for days shot in another State?
A: No. The purpose of the MPIP is to encourage the use of Utah as a site for the production of motion pictures, television series, and made-for-television movies. The only expenses, including payroll to a Utah resident, that are qualified as Dollars Left in State must have taken place in the State of Utah.