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The Pennsylvania Film Production Tax Credit

written by: Shane Burley•edited by: Rhonda Callow•updated: 3/30/2011

Here is a look at film production tax credits and what the state of Pennsylvania has to offer.

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    What is a Film Production Tax Credit?

    The concept of a film production tax credit is to draw film productions to a particular state or area, which has an incredibly positive impact on the economic environment of the area. For every dollar spent on production in a given state there is 2.3 times that as a positive addition to the local economy, which is a major boost for business in that area. This is why it is incredibly important for states to draw that industry in, which will also create incredible employment opportunities.

    What this means for most local film commissions at the state level is to use a film production tax credit, which essentially gives the production a tax break. What the film production tax credit will do is essentially require that a certain percentage of production and staffing is done in that state, and then it will give them a percentage break on a certain number of taxes.

    This adds to the benefits of specific production locations when the location scout and producer are looking around as to where to shoot the project. They will look for places that will reduce costs, and the film production tax credit will be part of their negotiation. Many states offer some sort of film production tax credit, and this is often first mentioned in production centers like New York and California. Other locations have begun to be major providers in an attempt to bring in more financial boosts to their state. Here is a look at the Pennsylvania film production tax credit.

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    Pennsylvania's Film Production Incentive Program

    Film in PA (PA Film Office) Logo The Pennsylvania film production tax credit is a fairly new one, and was just signed in in 2004. With the Pennsylvania film production tax credit you can receive a total of a 25 percent transferable reduction on taxes including the corporate net income, personal income tax, franchise tax, and capitol stock and foreign franchise tax. To qualify for this, a full 60 percent of the total production expenses must be spent in the state of Pennsylvania. In general, above the line positions, such as the director, are not a part of the film production tax incentive program.

    There are caps to the Pennsylvania film production tax credit. As of the 2009 report, there was a $15 million dollar cap for each project and only a total of $75 million for the entire state. This is not going to be relevant for most independent digital video filmmakers, but will affect incredibly large studio films or television shows.

    There are also going to be some projects that are not accepted as part of the Pennsylvania film production tax credit. If you want your project to actually qualify for the film production incentive program, it must be a feature film, a commercial for a national audience and not a regional one, or a real television show that is at least fifteen minutes in length and also for a national audience.

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    Film in PA.

    Legislative Budget and Finance Committee: Pennsylvania Film Production Tax Credit and Industry Analysis