Senate Bill 165: Transferable Tax Credits for Film Industry

by Snell & Wilmer

The film industry is a very exciting business and requires the involvement of many individuals and entities to complete a production. Bringing a commercial or full-feature film to millions of viewers is dependent upon the coordination of locations, support crews, actors and governmental permitting requirements.

Film production is an important sector of economic development in Nevada. Many productions are filmed in Nevada with the help of the Nevada Film Office that assists producers in identifying locations and acquiring the correct permits. Since 2001, Nevada’s film industry has declined by over 40 percent. Producers brought their own crews rather than hiring local labor. During the 2013 Legislative Session, to encourage producers to film in our State, the Legislature passed and the Governor signed Senate Bill 165 that allows the Governor’s Office of Economic Development to approve transferable tax credits for qualifying productions.

Forty other states have adopted film incentives in the form of tax credits, rebates and exemptions. A few states offer incentives for hiring in-state residents. In drafting the bill, the tax credit programs in the other states were carefully reviewed, and the best features of each were selected.

The bill creates a pilot program of transferable tax credits for film producers of productions that meet specific criteria. The program is administered by the Office of Economic Development. Producers can apply for a certificate of transferable tax credits beginning January 1, 2014, and ending December 31, 2017. Qualifying productions must meet certain basic requirements, which are: the production must be in the economic interest of the State; at least 60 percent of the total qualified expenditures and production costs will be incurred in the State; and the production costs exceed $500,000.

Film budgets include “above-the-line” fixed costs, which are actors, producers, writers and directors, and “below-the-line” variable costs, which are crew members such as grips, camera operators, stylists, make-up artists and film editors.

For determining the tax credit, qualified productions are defined and include preproduction, production and postproduction stages for productions such as television pilots, commercials, music videos and documentary films, among others. A qualified production must provide an itemized report from an audit performed by an independent certified public accountant in the State approved by the Office of Economic Development. The bill lists specific purchases of tangible personal property or services from a Nevada business that may be used as a basis for qualified expenditures and production costs. Within 14 days of receiving the report, the Office of Economic Development will make a final determination if a certificate of transferable tax credits will be issued. Approved credits can be applied against taxes imposed on financial institutions, for the modified business tax, gaming license fees or insurance premium taxes.

The amount of transferable tax credits issued to an eligible producer must equal 15 percent of the cumulative qualified expenditures and production costs with separate calculations for wages and salaries. Additional credits are allowed if more than 50 percent of the below-the-line personnel hired are Nevada residents; and if more than 50 percent of the filming days occur in a county in which qualified productions incurred less than $10 million of direct expenditures in each of the two years immediately preceding the date of application. The total amount of credits for a single production is capped at $6 million and the amount of credits in a single fiscal year is capped at $20 million. Any credits issued expire four years from the date on which they are issued.

Economic development at the local level is also important. One of the lawyers on the firm’s team has a very unique perspective into the legislation — Aaron Ford, who co-authored and sponsored the bill. Co-sponsored by 18 other Nevada state legislators, it contains provisions for allowing the governing body of a city or county to abate any percentage of the amount of permitting fees they are authorized to impose. However, the governing body must first provide by ordinance for a pilot project for granting abatements to qualified productions.

Encouraging economic development and increasing the types of industries in Nevada is important to the State of Nevada. Providing incentives with specific parameters to film production companies can help improve employment opportunities for citizens and put people to work. Nevada can offer film producers a willing work force, local talent, distinctive landmarks and scenery, and other advantages that are unique to our State. This measure can help bring back the economic benefits of the film industry to Nevada and create a long-term job market that helps citizens and local businesses.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Snell & Wilmer | Attorney Advertising

Written by:

Snell & Wilmer

Snell & Wilmer on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.