1. How do I go about creating a realistic budget for my project?

2. What Film Incentives can I find in the United States?

3. What has to be considered in terms of looking for film funding and financing a project?

1. How do I go about creating a realistic budget for my project? Creating A Budget If you're a regular watcher of independent cinema, you've probably experienced them: the glaring errors, the awkward glitches, and the low-budget blunders that characterize a film as, in the worst sense of the word, independent. When they make their awkward appearance on the screen, we roll our eyes heavenward, struggling to understand how filmmakers could let such monstrous gaffes slip under the radar. While studios can underwrite lengthy reshoots, artful editing, and enough F/X explosions to distract an audience from almost anything, indie filmmakers are often forced to cross their fingers and hope no one notices the boom in the shot, the hole in the plot, or the day the lead actress was having an allergic reaction to her cough suppressant. And while some flubs can actually lend a low-budget charm to the film, others are serious enough to send viewers streaming out of the theater. For beginning low-budget filmmakers, the trick is knowing which indie cliches are merely annoying and which are truly deadly. Sound Advice "Technical flaws in the picture don't bother me as much, whether the film is grainy or dark, but I think people don't put enough thought into their sound" says Ryan Kent, producer of the documentary Another Paradise. "If the sound sucks the uninformed person will attribute that to the actual quality of the filmmaking." The informed viewer will also have a reason to condemn the film - especially when it comes to coughing up distribution dollars. "The absolute benchmark of a cheap film, and the reason a lot of them don't get distribution, is because they have such terrible, lousy sound," explains Mary Hillard, the producer and director of the nationwide film and video showcase TV Bounty. "It really will shoot down an independent production because you have to spend so much money to fix it." Strong sound is especially important for filmmakers traveling the festival circuit. "There's no guarantee you'll screen in a studio theater," says Hillard. "A lot of festivals have screening in gymnasiums, for example. So if you're coming in with bad sound and then screening in a theater that may not have great sound, you've got two counts against you." One reason for bad location recording cited by sound editors is that inexperienced producers have a tendency to hire novices for important sound work. "Often you have someone who's just learning as the boom operator," says Adam Livingstone, president of Video Post and as well as an editor and supervising sound editor. "People don't think about sound until the last minute - the image is afforded much more importance," he continues. "The best-sounding films are [the ones in which] the producer cared enough to get the DP and sound department rehearsing ahead of time." Low-budget locations can prove to be problematic sound-wise; often locations are chosen because they're cheap and without a thought given to background noise. he advises, "The director should be designing all his shots to get good audio. Sometimes a great-looking location is just too noisy to mike well." Short schedules also contribute to poor sound. When there's a problem, inevitably someone in production will say, "We'll just loop it later." However, low-budget productions unable to afford a lengthy mix with a top-notch mixer may discover that cheaply recorded and hastily mixed ADR sounds just as bad as a muddy location track. Sound problems not anticipated and corrected in production end up costing the filmmakers a lot of money in post. The filmmaker ends up relying on the post process to correct for conditions such as improper sample rates, no pulldown, using video speed instead of film speed, improperly referencing decks so that there end up being drifts, and times codes that are off. "The computer age can save you money," says Livingstone, "but only if you plan ahead. [Before you start shooting] you should know who's doing your audio post, get their specs, determine the most effective way to sync dailies, decide whether you'll use simuldats or have someone else provide you with flexfiles." Bad Booming Booms that make it into the final print are often the first sign of a limited budget. Because the 35mm film exposed inside the camera contains a frame significantly larger than both the 1.85 aspect ratio picture that usually shows in theaters and the taller picture that plays on TV, the boom will appear within the d.p.'s eyepiece, but it shouldn't dip below the frameline. On complicated dolly moves or scenes in which actors stand up and move around, this can be harder than it sounds. The boom gets in the shot when, as location mixer Dan Ludwig says, "The boom operator thought he knew the boundaries but didn't; the camera operator should have noticed but didn't...." And, as Livingstone adds, "Not only don't independent filmmakers have the resources to shoot again, but a lot of first-time indie filmmakers don't use video monitors. They may not even be getting dailies, so they don't see the mistakes until they're in post." Almost as common as the boom in the shot is the boom shadow in the shot. Boom shadows are often a result of limitations in the lighting package. Cheaper packages often contain smaller instruments with harsher light sources which create harder, more visible shadows. And of course, raising the boom higher in the frame to keep a shadow from falling means sacrificing sound quality. Lack of communication on set is also often responsible. "The better the relationship the sound department has with the d.p. and the lighting people, the better the film will be," Ludwig explains. "It's important that everyone knows what the other departments' needs and limitations are. Too often, however, you'll have a d.p. who works very quickly and isn't sound-friendly, who doesn't communicate or doesn't even know what the frame is. Or you'll find a lighting department that isn't keeping sound and shadows in mind. Sloppy communication leads to sloppy errors." You've Got to Focus A sharply focused picture would seem to be the minimum requirement of any motion picture. That said, it's surprising how many films - mostly independent but also a startlingly high number of studio releases - contain soft and sometimes out of focus scenes. Inexperienced focus pullers, combined with d.p.s working with extremely shallow depth of fields, are the main reasons scenes go soft. Also, many indie filmmakers, especially those who cut on video, opt to forgo workprinting because it's an extra expense. "In cases where the filmmaker doesn't print right away, there are shots out of focus that get into the film if the performance is good," notes Livingstone. The video transfer process often tightens up a shot or corrects exposure problems, making it impossible to determine how soft, light, or dark a shot is until it's finally printed on film. When the first answer print arrives, "filmmakers are often so wedded to the performance that they'll let mistakes slide for the sake of keeping the take." Soundtrack Shortcomings While an occasional soft shot isn't a tragedy, an inappropriate soundtrack, even on the festival circuit, is. Mentioned repeatedly as a pet peeve by everyone from producers to screenwriters to grips, a jarring tune or cheesy score can irretrievably taint a viewer's perception of the entire film. "Lounge-lizard-type music, even though I like that kind of music, is the cliche of independent films," explains Johan Goldberg, the director of the feature Camp Commanders. Besides investing the film with a perhaps unwanted ironic sensibility, a familiar or over-amped soundtrack can simply distract. And overuse of expensive source cues may work for films like Forrest Gump but are distracting when used in low-budget indies. One of the most difficult problems for a new filmmaker is the temporary soundtrack that grows to be "perfect." "A lot of first-time directors get very attached to their temp tracks and this is dangerous," says composer Chris Ramirez, who recently scored Hotel California II. "Inevitably the songs will be well beyond the scope of the budget, so their next recourse is to ask the composer to copy it. You end up with a weak imitation rather than allowing the composer to come up with something fresh and innovative." Ramirez says that another habit is to not even consider scoring. "A lot of directors will use the Quentin Tarantino route - instead of taking advantage of the emotional richness and impact that a score can add, they try to use songs, many of which just won't work as well." Yet another scoring error is putting it off. "Scoring comes last, usually just after the budget has been all used up," says Ramirez. "Instead of waiting, hire your composer before you start shooting. Find out how much it will cost and how long it will take. Then you'll know to reserve that in the budget." Ramirez adds, "It's amazing what a well-crafted score can bring back to a film." Handheld Hell Thanks to the trendiness of handheld camera-work, most filmmakers assume they have some leeway when it comes to cinematography. "Fashion aside, it's probably a good idea to spring for a tripod. I've seen some incredibly bad camerawork, and I feel sometimes it's done on purpose, like handheld stuff that makes you want to vomit," complains Ramirez. And Blush comments, "Handheld is a big staple. It's like, 'My film is very cinema verite,' when you know that the filmmaker couldn't afford a tripod. It's all about motivation. Is there a reason why this film has lots of shaky cinematography? If so, great, but if not, you've got to make the time to lock your shot down. Not everything can be justified as art." So how do you get good handheld camerawork? According to Mary Pate, director of the upcoming Joyhill as well as Laws of Understanding, the film that boasts perhaps the best use of handheld camerawork in recent years (and which may be responsible for the technique's continued popularity), the key is getting the right cinematographer. Pate explains: "I knew that our film would be handheld, so I put out the word that I needed a good handheld d.p. Owen Frans name kept coming up. While he didn't have a lot of dramatic experience he did have experience in documentary filmmaking." Pate notes that there's a common misapprehension regarding the skills to shoot handheld. "d.p.s are very macho about handheld cinematography - they all want to put the cameras on their shoulders and prove that they can do it. But some can't. It takes a special kind of skill, and either you have that sense of composition and grace or you don't." Editing Evils On a film constrained by budget, fancy camerawork should be of secondary concern; usually it's difficult enough to provide adequate footage. The indie director who avoids coverage - multiple camera setups covering the same action from different positions and with different kinds of shots - risks cutting off his nose to spite his face. Too many directors decide to shoot just masters, considering it a stylistic choice. Jan Nelson, film editor of Nowhere to Go, "With one of the films I'm now working on, it's all shot in masters - and sometimes with only a single take - so what can I do? There are huge story holes I can't fill." With a little bit of coverage, editors can better performances, fix narrative gaffes, and improve pacing, yet many first-time filmmakers are unable to anticipate their editing needs while on the set. Without adequate coverage, editors are often left with few options; budget permitting, the editor can hand the director a long list of insert shots or resort to using stock footage, which won't always work. Plus, as Nelson cautions, stock footage is very expensive: "If you're relying heavily on [stock footage], you're already offsetting any savings of not shooting it in the first place." Nelson recommends bringing the editor on early to discuss the shot list, especially if there's a low shooting ratio. There are many issues an editor, working with the director and d.p., can resolve before the shooting starts. "Anyone using a master-shot style, with long tracking shots and what not, is wise to back it up with additional coverage," Nelson affirms. Continuity mistakes are another production problem editors are commonly called upon to remedy. Laura-Anne Williams, who edited several features, laughs, "One of the most difficult problems to fix is missing the shot that gets the actors from one end of the room to the other." "[This isn't to say] continuity mistakes aren't in big budgets too," She adds, "but without coverage they are really hard to cover up." One editing trick is cutting from frame during action so the eye is distracted by movement and won't notice a gaffe. Stale Sets A few of the other common low-budget, first-timer gaffes don't require inborn talent and can thus be more easily remedied. Williams lists a few: "If you watch carefully, sometimes you'll see the reflection of the crew in a close-up of a car, or you'll see a lightstand or a cable trailing off into the void." The reflection of the camera and crew off of glass can be avoided. "Using polarizing filters can lessen the reflections," says cinematographer Bill Vogt. "Or you can try to black out the camera. It depends on how much of the window and the reflection you want versus what's on the other side of the window." Vogt also notes that shifting the angle of your shot might also work, as does making sure that the subject being photographed is brighter than the light around the camera. Inappropriate set design is another indie staple. "Some cliches work for characters, but there's often another way to create a character without sticking to a cliche," explains Vogt. "For instance, you can have a nice bohemian pad without jalapeno lights." Capturing the boho essence is often tricky, yet its importance cannot be underestimated - a false note can raise eyebrows in a style-conscious indie crowd. But there can be too much of a good thing. "I think there's a tendency to make everything look like the East Village in New York. Everything has to have this avant-garde feel to it," says Vogt. White walls are a commonly cited critique of low-budget production design. "They just look bad," comments production designer Beatrice Jonson. "Darker walls show off the skin tones of your characters. And it's easier to light when you don't have to keep the lights away from the walls. When lights hit the white paint, the wall looks flat," she explains. Block says that she often will use thin wood covered with wallpaper as a way to cover walls that can't be painted. "Or I'll put up foamcore covered with fabric. Then you don't have to spend the time restoring the wall when you're finished." Familiar Faces Indie filmmakers are just as capable as their studio brethren of casting cliches. "I'm getting a little tired of seeing all the same familiar old faces in independent films" says Scream screenwriter Kevin Williamson. "Some actors are just getting known as independent film actors, and it's just like seeing a big name actor in the same old role." Comments UCLA screenwriting instructor Frank Deese, "People go to movies to see stars because they're getting the same familiar persona from movie to movie, and that's not what you want in a good independent film." Narrative Nuisances While many of these cliches are ones that are only discovered after the camera is already rolling, there is at least one that can, if caught in time, be fixed before anyone's on the payroll. Mike Conway, comments, "Scripts don't necessarily need to be plot-driven, but they need to be well-structured. Many independent films are personal or autobiographical, and this leads writers to make assumptions about their characters. The writer knows him or herself well, but may not know how to develop that character onscreen. There's a loss of clarity." For Conway, however, the chief error she encounters in indie scripts is a lack of focus. "The writer often hasn't come to terms with what the story is about, and this contributes to basic structural problems in storytelling." Often the scripts aren't gold - and filmmakers look for other hooks to lure distributors. "There are a lot of art films that feature nudity that tries to apologize for itself," says Blush. "Usually it's not necessarily erotic nudity, it's the nudity of somebody who's being horribly abused or the nudity of someone who is trapped in a difficult situation." Post-Tarantino excessive violence has become an indie staple and not always to great effect. "I'm not against an ear getting lopped off if it's done for a reason, but there seems to be a need in independent films for some especially gory, violent thing that pushes it into another realm," says Conway. Screenwriter Rick Little agrees. "You need to find the thing that's unique in your story," he says. "A lot of times people end up imitating other films, or they use the same kinds of references that seem currently hip. Right now it's '70s pop culture and sudden violence. But you know when people are trying too hard to be hip or wacky. It doesn't work." While the studio system may frequently churn out tired material, it usually conforms to the tried-and-true three-act structure - a device that more indie filmmakers may want to look into according to Littlr. "Another cliche would be a lack of resolution - abrupt endings. I tend to jump a little when the credits roll on an independent movie. It's over already? That was the ending?" says Little. "I don't want a message, but the movie needs to be complete unto itself in some way. Some filmmakers don't think they have to follow the rules of dramatic structure because artists don't follow the rules." Of course, there are films that break every one of these rules and succeed because of, not in spite of, their disobedience. The great film auteurs do break the rules, but they break them brilliantly. "All the hacks break them horribly," says Little. Fledgling filmmakers plagued by memories of chili-pepper lights and shopping-cart dolly shots can comfort themselves by placing themselves in the former category - and perhaps next time learn from their mistakes. DISCLAIMER: The information provided here is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Many of the legal principles mentioned might be subject to exceptions and qualifications, which are not necessarily noted in the answers. Furthermore, laws are subject to change and vary by jurisdiction.

2. What Film Incentives can I find in the United States? Domestic Incentive Programs DISCLAIMER: Before relying on any of the incentive programs listed here, please consult with an attorney knowledgeable about the applicable laws and make sure to check that the provisions have not changed. ALABAMA: Incentive information: http://alabamafilm.org/filmakerincentives.htm Film office: http://www.alabamafilm.org Brenda Hobbie, Film Office Coordinator Alabama Center for Commerce 401 Adams Avenue Suite 630 Montgomery, AL 36104 Phone: 334-242-4195 or 1-800-633-5898 Fax: 334-242-2077 Email: hobbieb@ado.state.al.us Incentives: Alabama offers sales tax and lodging tax exemptions to qualified productions. ALASKA: Film office: http://www.dced.state.ak.us/trade/film/film.htm Alaska Film Program P.O. Box 110804 Juneau, AK 99811-0804 Phone: 907-269-8112 Email: Alaskafilm@dced.state.ak.us Incentives: There is no sales tax in Alaska and there are no fees for shoots on city, borough, and state-owned property. ARIZONA: Incentive information: http://www.commerce.state.az.us/Film/Incentives.htm Film office: http://www.commerce.state.az.us/Film/default.asp Robert Detweiler, Director Arizona Film Commission 3800 N. Central Ave. Bldg. D Phoenix, AZ 85012 Phone: 602-280-1380 or 1-800-523-6695 Fax: 602-280-1384 Email: film@azcommerce.com Incentives: Sales Tax Rebate Arizona offers a 50% state sales tax rebate to motion picture and television/video production companies spending at least $1 million in qualified expenditures over a consecutive 12-month period. The rebate is also available to commercial advertising production companies spending at least $250,000 in qualified expenditures over a consecutive 12-month period. The productions must be filmed in Arizona. State sales tax is 5%. Call Christi Comanita at (602) 542-4672 early in production for more information about the rebate program. Use Fuel Tax Exemption Production vehicles entering Arizona for the purpose of motion picture production on location are exempt from the Use Fuel Tax. Call George Collaco, Port of Entry Supervisor, at (520) 927-6652 for more information about qualifying. ARKANSAS: Incentive information: http://www.1800arkansas.com/Incentives Film office: http://www.1800arkansas.com/Film/ Joe Glass, Film Unit Leader One Capitol Mall Little Rock, AR 72201. Phone: 501-682-7676 Fax: 501-682-FILM Email: jglass@1800ARKANSAS.com Incentives: Arkansas offers a sales and use tax refund program rebating 5 cents for every dollar spent on qualifying motion picture production. Qualifying motion picture production businesses spending more than $500,000 within six months, or $1 million within 12 months, in conjunction with the filming or producing of one feature film, telefilm, music video, documentary, episodic television show, or commercial advertisement may receive a refund of state sales and use taxes paid on qualified expenditures incurred in conjunction with the project. CALIFORNIA: Incentive information: http://www.filmcafirst.com Film office: http://www.film.ca.gov California Film Commission 7080 Hollywood Blvd., Suite 900 Hollywood, CA 90028 Phone: 800-858-4PIX (4749) 323-860-2960 Fax: 323-860-2972 Incentives: Refunds: Under the Film California First program filmmakers can receive reimbursement of up to $300,000 to qualified productions that film on public property in California. Rebates are given for public labor and location fees for use of public properties. The program will also reimburse the cost of local law enforcement, up to $750 per day, with a maximum cap of $3,000 per production. See http://ww.film.ca.gov and http://www.filmcafirst.com. Reimbursements from the fund are on a first-come, first-served basis. The funds available fluctuate annually depending on what is allocated to it in the state’s budget. A production company needs to complete production before applying. The State Theatrical Arts Resources (STAR) program provides filmmakers with the use of State-owned surplus, such as vacant buildings, at little or no charge. The properties available can be viewed on-line by use of the CinemaScout (http://www.cinemascout.org). Tax Breaks: California also offers some tax incentives. There is no state hotel occupancy tax. There is no sales or use tax on production or postproduction services on motion pictures or TV films. There is a 5% sales tax exemption on the purchase or lease of post-production equipment for qualified persons. COLORADO: Film commission: http://www.coloradofilm.org Colorado Film Commission 1625 Broadway, Suite 1700 Denver, CO 80202 Phone: 303-620-4500 Fax: 303-720-4545 Email: Coloradofilm@state.co.us Incentives: Colorado hotels may offer a sales tax rebate for stays of 31 days or longer. As the rebate is discretionary, ask before booking your stay. Colorado offers no other incentive programs. CONNECTICUT: Incentive information: http://www.ctfilm.com/pdf/tax_exemptions.pdf Film, Video & Media Office: http://www.ctfilm.com/ Guy Ortoleva, Director Connecticut Film, Video & Media Office 805 Brook Street, Building 4 Rocky Hill, CT 06067 Phone: 800-392-2122 or 860-571-7130 Fax: 680-721-7088 Email: info@Ctfilm.com Incentives: Connecticut generally does not levy sales/use tax or property tax on machinery, equipment and services leading up to the production of a film, video or sound master recording. Once the master has been created, duplication or 'non-creative' functions remain taxable. DELAWARE: Film office: http://www.ci.wilmington.de.us/departments/cultural.htm Tina Betz, Director Wilmington Film Office Louis L. Redding City/County Building 800 N. French Street, 9th Floor Floor Wilmington, DE 19801 Phone: 302-576-2136 Incentives: Delaware has no sales tax. Permit fees are low and generally negotiable. The state has no other incentives directly targeted toward filmmaking. FLORIDA: Incentive information: http://www.filminflorida.com/incentives/index.htm Film office: http://www.filminflorida.com Ally Hugg-Fields Production Manager Governor's Office of Film and Entertainment Executive Office of the Governor The Capitol Tallahassee, FL 32399-0001 Phone: 877-FLA-FILM (toll-free) or 850-410-4765 Fax: 850-410-4770 Email: Ally.Hugg@myflorida.com Susan Simms, Los Angeles Liaison Governor's Office of Film & Entertainment 5426 Simpson Avenue North Hollywood, CA 91607 Phone: 818-508-7772 Fax: 818-508-7747 Email: filmflorida@earthlink.net Incentives: Florida Entertainment Industry Tax Exemption Qualified motion picture, TV motion picture, TV series, commercial advertising or music video production and sound recording companies engaged in Florida may be eligible for a sales and use tax exemption on the purchase or lease of certain items used exclusively as an integral part of the production activities in Florida. An application is available on the Florida Film Office website at http://ww.filminflorida.com Qualified Target Industry Refund Companies creating jobs in motion picture production in Florida, excluding location filming, are eligible for a Qualified Target Industry (QTI) Tax Refund. Pre-approved applicants who create jobs in Florida receive tax refunds of $3000 per new job created, and $6000 in an Enterprise Zone or Rural County. For businesses paying 150% of the average annual wage, add $1000 per job; for businesses paying 200% of the average annual salary, add $2000 per job. For more information about this program, call Enterprise Florida at 850.488.6300. Rural & Urban Job Tax Credit Programs Companies creating jobs in any of Florida’s 17 designated rural counties and 13 designated urban areas can qualify for tax credits from $500 to $2000 per qualified job. For more information contact the Office of Tourism, Trade & Economic Development at 850.487.2568. Enterprise Zones Business that create jobs within an enterprise zone may be eligible for additional tax credits, including a sales and use tax credit, tax refund for business machinery and equipment used in an enterprise zone, sales tax refund for building materials used in an enterprise zone, and a sales tax exemption for electrical energy used in an enterprise zone. For more information contact the Office of Tourism, Trade & Economic Development at 850.487.2568. GEORGIA: Film office: http://www.filmgeorgia.org Greg Torre, Director Georgia Film, Video & Music Office 285 Peachtree Center Ave., Suite 1000 Atlanta, GA 30303 Phone: 404-656-3591 Fax: 404-656-3565 Email: Film@georgia.org Incentives: Qualified film producers and qualified film production companies in George are exempt from sales and use tax on most below-the-line equipment rentals/purchases. Most below-the-line materials and service purchases are included in the exemption. Georgia state sales tax is 7%. Qualified productions include: feature films, television movies and series, commercials, music videos and documentaries that will be distributed to areas outside of the State of Georgia. For more information or to obtain an Application for a Certificate of Exemption, visit http://www.filmgeorgia.org. HAWAII: Incentive information: http://www.hawaiifilmoffice.com/incentives_credits.htm Film office: http://www.hawaiifilmoffice.com Hawaii Film Office No. 1 Capitol District Building 250 South Hotel St., 5th Floor Honolulu, HI 96813 Phone: 808-586-2570 Fax: 808-586-2572 Email: info@hawaiifilmoffice.com Incentives: Hawaii recently enacted some very impressive and generous tax incentives. Hawaii’s high tech investment tax credit provides a 100% return on cash investments in a qualified high tech business (QHTB) on a front-loaded basis over 5 years (35% credit in the year of investment, 25% in the following year, 20% in the second year following, then 10% each in the third and fourth year following). Qualified research activities include performing arts products such as motion pictures. The credit is designed to give a 100% return for investments up to $2 million per year per QHTB. The credit applies against Hawaii income tax liability only. The credit can be taken by individuals and corporations paying Hawaii income tax, and by banks and insurance companies against their franchise and insurance premium tax. Moreover, if money from outside Hawaii is invested, the tax benefits can be allocated to the Hawaiian investors so they can obtain more than 100% return. So for example, if a Hawaii investor put up $500,000 and an Arkansas investor put up $500,000, the parties could agree to allocate all the tax credits to the Hawaii investor (since the Arkansas investor doesn't pay taxes in Hawaii they are worthless to him anyway). So the Hawaii investors gets back 200% return over 5 years. In return, the Arkansas investor could be given a greater share of the back end, or preferred recoupment. The production entity would be required to employ or own capital or property or maintain an office in Hawaii, to have more than 50% of its total business activities in performing arts products and to conduct more than 75% of those activities in Hawaii. In other words, 75% of the budget needs to be spent in Hawaii. I currently represent a Hawaiian company that can serve as the production entity that has received a comfort ruling from the Department of Taxation indicating that the company qualifies. In order to qualify, companies need to stay in business in Hawaii for at least five years, and should have some copyright ownership of the picture. There are many more details but those are the basics. For additional information about Hawaii’s tax incentives, go to http://www.state.hi.us/tax/hi_tech.html. IDAHO: Incentive information: http://www.filmidaho.org/permits/index.html Film office: http://www.filmidaho.org/ Idaho Film Bureau 700 W. State Street Box 83720 Boise, Idaho 83720-0093 Phone: 800-942-8338 or 208-334-2470 Fax: 208-334-2631 Email: powens@idoc.state.id.us Incentives: Idaho offers an exemption from sales or hotel taxes on lodging stays of 30 or more days. The state offers no other incentive programs. ILLINOIS: Film office: http://www.commerce.state.il.us/film/ Illinois Film Office 100 W. Randolph St., 3rd Floor Chicago, IL 60601 Phone: 312-814-7179 TDD: 800-419-0667 Springfield Office 620 E. Adams Springfield, IL 62701 Phone: 217-782-7500 TDD: 800-785-6055 Incentives: Illinois does not levy sales tax on 35mm film development for film productions. Hotel stays of 30 consecutive days or more are exempt from the 14.9% Illinois hotel occupancy tax. After 30 days, all taxes are waived and the occupant is credited for the first month’s tax. INDIANA: Film commission: http://www.state.in.us/film/ Indiana Film Commission Indiana Department of Commerce One North Capitol Avenue -- Suite 700 Indianapolis, IN 46204-2288 Phone: 317-232-8829 Fax: 317-233-6887 Email: filminfo@commerce.state.in.us Incentives: Indiana had no incentive information available at the time of printing. IOWA: Film office: http://www.state.ia.us/film/ Iowa Film Office Phone: 515-242-4726 Fax: 515-242-4809 Email: filmiowa@ided.state.ia.us Incentives: Iowa has no incentive program. KANSAS: Film office: http://www.filmkansas.com Peter S. Jasso Kansas Film Commission Manager 1000 S.W. Jackson Street, Suite 100 Topeka, Kansas 66612-1354 Phone: 785-296-2178 Fax: 785-296-3490 E-mail: pjasso@kansascommerce.com Incentives: Louisiana does not levy hotel occupancy tax for stays of 28 days or longer. LOUISIANA: Incentive information: http://www.lafilm.org/info/index.html Film office: http://www.lafilm.org Incentives: Sales and Use Tax Exclusion Production companies based in Louisiana that have anticipated expenditures of $250,000 or more are excluded from the state’s 4% sales and use tax. This exclusion is effective until January 1, 2007. To receive the exclusion, production companies must report the expenditures from a Louisiana checking account established in connection with the filming or production of one or more nationally distributed motion pictures, videos, television series, or commercials in the state of Louisiana within any consecutive 12-month period. Labor Tax Credit Motion picture production companies filming a nationally distributed motion picture in Louisiana are eligible for a labor tax credit if they create jobs for Louisiana residents in connection with filming a motion picture, video, television series or commercial in state. For projects with production costs in Louisiana of at least $300,000 but less than $1 million during the taxable year, the labor tax credit is equal to 10% of the total aggregate payroll for residents employed in the production. For projects with production costs in Louisiana of at least $1 million during the taxable year, the credit is equal to 20% of the total aggregate payroll for residents employed in the production. In both cases, total aggregate payroll does not include the salary of any employee whose salary is equal to or greater than $1 million. The credit can be applied to any income tax or corporation franchise tax liability applicable to the motion picture production company. If the motion picture production company is not subject to income or franchise tax, the credit flows through its partners or members. Any unused credit may be carried forward no more than 10 years from the date the credit was earned. Investor Tax Credit Investors who are taxpayers domiciled and headquartered in Louisiana can claim an investor tax credit if they invest in a nationally distributed feature-length film, video, television program or commercial made in Louisiana in whole or in part. The credit is earned at the time of investment. If the total base investment is greater than $300,000 and less or equal to $1 million, each taxpayer can take a tax credit of 10% of the actual investment made by that taxpayer. If the total base investment is greater than $1 million, each taxpayer shall be allowed a tax credit of 15% of the investment made by that taxpayer. In the event that the entire credit cannot be used in the year earned, any remaining credit may be carried forward and applied against income tax liabilities for the subsequent 10 years. MAINE: Incentives: http://www.filminmaine.org/filmnew/frames.html Film office: http://www.state.me.us/decd/film/ Maine Film Office 59 State House Station Augusta, ME 04333 Phone: 207-624-7631 Fax: 207-287-8070 Email: filmme@earthlink.net Incentives: Sales Tax Exemption Maine-based production companies and to out-of-state production companies working in Maine can apply for sales tax exemptions for equipment and machinery purchases, and fuel and electricity costs. Lodging Tax Reimbursement Production companies staying in hotels for more than 28 consecutive days can apply for a lodging tax reimbursement. Production companies must contact the Maine Revenue Service early in production to apply for these incentives. Contact the Maine Revenue Service at: Maine Revenue Services, Sales/Excise Tax Division, P.O. Box 1065, Augusta, ME 04332-1065; Taxpayer assistance line: (207) 287-2336; e-mail address: sales_tax@state.me.us MARYLAND: Incentive information: http://www.mdfilm.state.md.us/salestax Film office: http://www.mdfilm.state.md.us/ Incentives: Maryland offers an exemption from the 5% state sales tax for goods and services used in filmmaking. For most localities, hotel stays longer than 30 days are not charged local or state sales tax. MASSACHUSETTS: The Massachusetts Film office has been closed due to lack of funding. MICHIGAN: Film office: http://www.michigan.gov/hal/0,1607,7-160-17445_19275---,00.html Michigan Film Office 702 West Kalamazoo Street Lansing MI 48915 Phone: 800-477-3456 or 517-373-0638 Fax: 517-241-2930. Email: jlockwood@michigan.gov Incentives: Michigan offers a hotel tax rebate after a stay of 30 days or more. MINNESOTA: Incentive information: http://www.mnfilm.org/board/incentives.asp Film Office: http://www.mnfilm.org Nicole Hinrichs-Bideau Minnesota Film and TV Board Phone: 612-332-6493 Fax: 612-332-3735 Email: nicole@mnfilm.org Incentives: Minnesota offers a 10% rebate on all Minnesota expenditures, free scouting, free permits, no sales tax on commercials, no lodging tax on hotel stays of 30 days or more, and free production office space, depending on location. MISSISSIPPI: Film office: http://www.visitmississippi.org/film/ Mississippi Division of Tourism Woolfolk State Office Building 501 West St. Jackson, MS 39201 Post Office Box 849 Jackson, MS 39205 Phone: 601.359.3297 Hot Line: 601.359.2112 Fax: 601.359.5048 Ward Emling, Manager Phone: 601.359.3422 Email: wemling@mississippi.org Incentives: Mississippi tax codes classify filmmaking as a manufacturing process. Raw materials such as film and videotape are not taxed. Some equipment used in production is taxed at 1 1&Mac218;2 % rather than 6%. In July 2003, the Mississippi legislature will also consider additional production incentives, including job tax credits, and credits for film funding and investment. MISSOURI: Incentive information: http://www.ded.state.mo.us/business/filmcommission/html/incentives.htm Film commission: http://www.ded.state.mo.us/business/filmcommission/ Missouri Film Commission 301 West High, Room 720 P.O. Box 118 Jefferson City, MO 65102 Phone: 573.751.9050 Fax: 573.522.1719 Email: mofilm@ded.state.mo.us Incentives: Qualified film production companies can receive a state income tax credit of up to 50% of the company’s expenditures in Missouri necessary for the making of a film, not to exceed $500,000 in tax credits per project. The tax credit is fully assignable, that is, the entity earning the credits may apply them against state income taxes or corporate franchise taxes, or they can be sold or transferred to another state taxpayer who may then apply them to their Missouri income tax liability. The credits can be applied when earned or carried forward for up to five additional tax periods. To qualify, the production company must spend $300,000 or more in state on expenditures necessary for the production of the film. Qualifying expenses include costs for labor, services, materials, equipment rental, lodging, food, location fees and property rental. Note that Missouri will only grant $1 million in these tax credits per year. Companies must therefore apply as early in production as possible, and must apply before they have selected Missouri as the project’s location. MONTANA: Incentive information: http://montanafilm.com/faqs.htm#anchorFAQ4 Film office: http://montanafilm.com/ Montana Film Office 301 S Park Avenue, Helena MT 59620 Phone: 800-553-4563 (outside MT only) or 406-841-2876 Fax: 406-841-2877 Info Hotline: 406-444-3960 Email: montanafilm@visitmt.com Incentives: Montana has no sales tax. No room tax is charged for stays longer than 30 days. Out of state equipment used exclusively in the production of motion pictures, television, or commercials is exempt from property tax for 180 consecutive days. Out-of-state commercial vehicles used exclusively in the production of motion pictures, television, or commercials are exempt from licensing requirements for 180 consecutive days. NEBRASKA: Film office: http://www.filmnebraska.org/ Laurie Richards Nebraska Film Officer Nebraska Film Office 301 Centennial Mall South, 4th Fl. Lincoln, NE 68509-4666 Phone: 800-426-6505 or 402-471-3680 Fax: 402-471-3365 Email: laurier@filmnebraska.org Incentives: Nebraska has no lodging tax after a 30-day or longer stay at the same facility. NEVADA: Film office: http://www.nevadafilm.com Nevada Film Office, Las Vegas Office 555 E. Washington Ave., Suite 5400 Las Vegas, NV 89101 Phone: 877-NEV-FILM (877-638-3456) or 702-486-2711 Hotline: 702-486-2727 Fax: 702-486-2712 Email: lvnfo@bizopp.state.nv.us Nevada Film Office, Reno/Tahoe Office 108 East Proctor Street, Carson City, NV 89701-4240 Phone: 800-336-1600 or 775-687-1814 Hotline: 775-687-4901 Fax: 775-687-4497 E-mail: ccnfo@bizopp.state.nv.us NEW HAMPSHIRE: http://www.filmnh.org/laws.html Film office: http://www.filmnh.org/ The New Hampshire Film Office 172 Pembroke Road P.O. Box 1856 Concord, NH 03302-1856 Phone: 800-262-6600 or 603-271-2665 Fax: 603-271-6870 Email: filmnh@dred.state.nh.us Incentives: New Hampshire does not levy sales tax, personal income tax, use tax, property tax on machinery or equipment, or capital gains tax. NEW JERSEY: Incentive information: Click on “Filming Regulations & Guidelines” on the Commission home page. Film Commission: http://www.njfilm.org/ Joseph Friedman, Executive Director New Jersey Motion Picture & Film Commission 153 Halsey Street - 5th Floor P.O. Box 47023 Newark, New Jersey 07101 Phone: 973-648-6279 Fax: 973-648-7350 Email: NJFILM@njfilm.org Incentives: Productions that rent hotel rooms for 14 or more consecutive days during production are eligible for a refund of room taxes. New Jersey offers a Sales & Use Tax exemption for tangible property and services purchased or rented for and directly used in the production of a motion picture or video. Food and drink brought onto or made on the location or set for cast, crew and employees is eligible for a sales tax rebate. Companies must fill out an Exempt Use Certificate to be eligible for the sales tax exemption. NEW MEXICO: Incentive information: http://www.edd.state.nm.us/FILM/RESOURCES/resource.htm Film office: http://www.edd.state.nm.us/FILM/ New Mexico Film Office P.O. Box 20003 Santa Fe, NM 87504-5003 Phone: 800-545-9871 or 505-827-9810 Fax: 505-827-9799 Email: film@nmfilm.com Incentives: Gross Receipts Tax Deduction Production companies filming in New Mexico can apply for an exemption certificate. The tax deduction is given on many production costs at the point of sale. For complete information on the point-of-purchase gross receipts deduction, contact the New Mexico Taxation and Revenue board and ask for Publication FYI 280: Sales to Qualified Film Production Companies. 15% Film Production Tax Credit This is a fully refundable credit of 15% of eligible direct production costs against the filmmaker’s New Mexico income tax. To qualify for either incentive, production companies must register with the New Mexico Film Office. Qualifying companies may choose one incentive per expenditure, however the state recommends that production companies shooting features, television programs, documentaries, shorts and national advertisements shown in theatres should apply for both incentives as early in production as possible. Feature-length films must include an on-screen credit for the State of New Mexico. No Location Fees for State Owned Buildings Filmmakers looking to shoot at any of almost 800 state-owned buildings can now shoot without paying location fees. In addition, the closed NM State Penitentiary property known as “Old Main”, a 1940s era maximum security prison facility with large open cellblocks, hospital wing, tunnels, and a vast array of office and open spaces, is also available for fee-free filming. NORTH CAROLINA: Incentive information: http://www.ncfilm.com/information/#tax Film office: http://www.ncfilm.com/ Bill Arnold, Director North Carolina Film Office 301 North Wilmington St. Raleigh, NC 27601 Phone: 919-733-9900 Fax: 919-715-0151 Production Hotline: 800-232-9227 Email: barnold@nccommerce.com Incentives: Tax and Fee Incentives North Carolina offers fee-free use of state property and a 1% cap on sales and use tax. State sales tax for hotel room occupancy in excess of 90 consecutive days is refunded. Filming Development Account North Carolina is now offering grants through its Film Development Account. These grants are given to filmmakers who engage in production activities in-state with expenditures in-state of at least $1 million. The grant cannot be used for political or issue advertising and may not exceed 15% of the total spent in-state in one calendar year for goods and services. The grant will not exceed $200,000 per production. All expenditure claims must be accompanied by a receipt or bill of sale and are subject to verification and approval by the NC Department of Commerce Finance Center, and reimbursements are subject to the availability of funds. For more information about the Film Development Account, contact the North Carolina Film Office at either 310 246-0076 (Los Angeles), or 919 733-9900 (Raleigh, NC). NORTH DAKOTA: Film commission: http://www.ndtourism.com/ Mark Zimmerman, Director North Dakota Film Commission 604 East Boulevard, 2nd Floor Bismarck, ND 58505 USA Phone: 800-328-2871 or 701-328-2525 Fax: 701-328-4878 E-mail: mzimmerman@state.nd.us Incentives: The Bank of North Dakota will consider co-financing motion pictures shot primarily in North Dakota if the production company has retained a domestic distributor or sales agent, has an experienced lead lender on board, has a completion bond in place, and has sold one territory large enough to validate the pre-sale estimates (this will be determined by the bank). The territory must be sold to a reputable and financially solvent distributor. The Basic Bank can provide up to 50% of the film budget less any equity investment and any pre-sold territories. All revenue proceeds except sales commissions, financing costs and collection account fees shall be applied to debt reduction. For more details, contact the Bank of North Dakota at 800-472-2166 and ask about the Motion Picture Financing. OHIO: Film commission: http://www.ohiofilm.com/ Amir Eylon Interim State Tourism Director Division of Travel and Tourism Ohio Film Commission Phone: 614-466-8844 Email: aeylon@odod.state.oh.us Incentives: Ohio has no incentive program. OKLAHOMA: Incentive information: http://www.otrd.state.ok.us/filmcommission/taxincintives.htm Film office: http://www.otrd.state.ok.us/filmcommission/ Oklahoma Film Commission Oklahoma City Office 15 N. Robinson Suite 802 Oklahoma City, OK 73102 Phone: 1-800-766-3456 In Oklahoma City: 405-522-6760 Fax: 405-522-0656 Incentives: Oklahoma Film Enhancement Rebate Program Oklahoma offers a 15% rebate on production money spent in state. Qualifying expenses include costs attributable to production, post-production and reproduction of long-form narrative film or television production. Expenditures must be documented. The rebate is refunded to the producers. Sales Tax Rebate As an alternative, production companies shooting in Oklahoma can apply for a refund of state and local sales taxes. The rebate is applicable to all goods and services used or consumed on almost any project shot in-state. The state’s current sales tax is 4.5%. Local taxes, which vary from city to city, average between 1% and 4%. OREGON: Film office: http://www.oregonfilm.org/ Incentives: Oregon has no sales tax. The Portland/Multnomah County area has a parking fee rebate program that can save productions up to $3500 on public parking area fees, depending on hotel room usage. No hotel/motel tax on rooms held longer than 30 days. TENNESSEE: Incentive information: http://www.state.tn.us/revenue/taxguides/index.htm Film office: http://www.state.tn.us/film/ Tennessee Film & Music Commission 312 8th Avenue North Tennessee Tower, 9th Floor Nashville, Tennessee 37243 Direct: 615-741-FILM Toll free: 1-877-818-3456 Fax: 615-741-5554 Hotline: 615-532-2770 Email: tn.film@state.tn.us Incentives: Sales & Use Tax Refund: Tennessee offers a refund on sales and use tax to production companies shooting in-state. Companies must first register with the Tennessee Film & Music Commission and the Tennessee Department of Revenue, and they must spend over $500,000 in connection with filming in Tennessee. Filming must be completed in less than 12 months and the rebate must be claimed no later than six months after the last day of production. TEXAS: Incentive information: http://www.governor.state.tx.us/film/salestax.htm Film office: http://www.governor.state.tx.us/film/ Incentives: Sales Tax Exemption: Texas offers production companies an exemption from sales tax on goods and services purchased, rented or leased for the production’s direct and exclusive use. This exemption applies to goods and services used in the production or post-production of the film or video master. Texas state sales tax is 6.25%, local sales taxes range from 0.25% to 2%. Productions eligible to qualify for this exemption include features, television projects, commercials, corporate films, infomercials or other projects for which the producer or production company will be compensated, and which are intended for commercial distribution. VERMONT: Film Commission: http://www.filmvermont.com/ Danis Regal, Executive Director P.O. Box 129 10 Baldwin Street Montpelier, VT 05601-0129 Hot Line: 802-828-3680 Telephone: 802-828-3618 Fax: 802-828-2221 Email Address: vtfilm@state.vt.us Incentives: Vermont offers Sales & Use Tax Exemptions on the purchase or rental of goods and services used in the making of a motion picture. The goods and services must appear in the film or be used directly in making the print. State sales tax is 5%. Companies that book in advance and stay in a hotel for 31 days or more are exempt from hotel tax. For the time that non-resident performers are working in-state, income taxes are assessed at whichever rate is lower, i.e., if the performer is a resident of a state that does not charge income tax, then they will owe no Vermont income tax. If the performer is a resident of a state that assesses a higher income tax than Vermont, they will owe the lower Vermont income tax on their wages earned. VIRGINIA: Incentive information: http://www.film.virginia.org/the-basics/savings-incentive.htm Film office: http://www.film.virginia.org Virginia Film Office 901 East Byrd Street Richmond, VA 23219-4048 Phone: 800-854-6233 or 804-371-8204 Fax: 804-371-8177 Hotline: 800-641-0810 Email:vafilm@virginia.org Incentives: Virginia offers Sales & Use Tax Exemptions that are offered at the point of sale (rather than as a rebate). Production items exempted include production facilities, cameras and related equipment, and editing, dubbing and sound equipment. Tangible personal property and some production and crew services are also exempted. Companies that stay in a hotel for more than 90 consecutive days are eligible for a 3.5% lodging tax rebate. Filming in most state-owned buildings can be done free of charge. WASHINGTON: Incentive information: http://www.oted.wa.gov/ed/filmoffice/incentives/index.html Film office: http://www.filmwashington.com Washington State Film Office 2001 6th Ave., Suite 2600 Seattle, WA 98121 Phone: 206-256-6151 Fax: 206-256-6154 Email: wafilm@cted.wa.gov Incentives: Tax breaks: Washington offers a state sales tax exemption on rental equipment and the purchase of services. There is no state income tax. Production companies can receive a refund on local, state, and special use taxes on rental vehicles used in production. There is also a lodging tax exemption available for stays of 30 or more consecutive days. The production must contract the stay before arrival. WASHINGTON, D.C. Film office: http://www.film.dc.gov Office of Motion Picture and Television Development 410 8th St., NW 6th Floor Washington, D.C. 20004 Phone: 202-727-6608 Fax: 202-727-3787 Incentives: Washington D.C. has no incentive program. WISCONSIN: Film office: http://www.filmwisconsin.org/ Mary Idso Film Office Coordinator Wisconsin Film Office 201 W Washington Ave 2nd Floor Madison WI 53703 Phone: 800-345-6947 Fax: 608-266-3403 Email: midso@filmwisconsin.org Incentives: Wisconsin has no incentive program. WYOMING: Incentive information: http://www.filmincasper.net/incentive.htm Film office: http://www.wyomingfilm.org Wyoming Film Office 214 West 15th St. Cheyenne, WY 82002-0240 Phone: 307-777-3400 Toll Free: 800-458-6657 FAX: 307-777-2838 E-mail: info@wyomingfilm.org Incentives: The Wyoming Film Office and the Casper Area Film Commission have asked Wyoming businesses to offer production companies filming in Wyoming a 10% discount on production related services. A list of statewide businesses participating in the program including hotels/motels, restaurants, caterers, etc., can be found at http://www.filmincasper.net/incentive.htm. To receive the discount, production companies must first request a Wyoming Production Incentive Program card from the film office. DISCLAIMER: The information provided here is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Many of the legal principles mentioned might be subject to exceptions and qualifications, which are not necessarily noted in the answers. Furthermore, laws are subject to change and vary by jurisdiction.

3. What has to be considered in terms of looking for film funding and financing a project? There comes a turning point for every filmmaker when they must make a decision about whether or not they wish to make a career out of film or if it is simply a hobby. Like it or not, this decision usually hinges on the filmmaker's ability (or inability) to finance his/her own projects. However, most filmmakers don't look past the initial financing, if that far. For any filmmaker to have a realistic grasp of working in the industry as a professional, some elementary film investing concepts must be understood. Although a common sense warning, every producer should be aware that there are plenty of "consultants" who are looking to take advantage of your ignorance. They are aware that you are not knowledgeable about the industry and will seek to part you from the money you have set aside for your project. There are plenty of legitimate organizations that will provide you with invaluable script evaluations and business plans but there are more who will take your money without bringing you any closer to your goal. On the same token, no legitimate organization will guarantee you access to potential investors. If they do, keep a tight grip on your checkbook. The merit of your project will determine if it should be presented to "the right people," not your amazing good fortune at stumbling onto the right consultant. Legitimate organizations understand that there is no real money to be made in the seven or eight hundred dollars most producers can afford for their services. There is enough to fuel a scam artist, but not an industry. Even taking a percentage of funds placed with your project isn't enough to interest a serious film finance organization. Although they will surely charge you fees for both services, their ultimate goal is the same as yours: to see your project find distribution. This is where the real payoff is for them and for you. If your retainer is not planning for distribution, it is a telltale sign that they are simply looking to make a quick buck from your personal savings. As tedious as it sounds, you want your consultant to be thinking in terms of accumulated interest on money borrowed over the time of production and other financials. The difficult part of this equation is convincing a legitimate producer's rep or financial consultant to get on board in the first place. The key to this is the investor, the ever-elusive financier who is willing to sink money into a high-risk film project. Once you begin dealing with these investors, it is critical that you understand the game from their perspective. The following are some basics of film investing, courtesy of Michael Harpster, an experienced consultant and producer's rep. An experienced film investor will never put up more than 50% in equity; if the producer cannot come up with the rest, the picture is not likely to go anywhere. They should also use leverage: 30%-40% in equity should get most films made if other end users will buy into the premise. There will also be desire on the part of the investor to keep budgets low, a rule of thumb being that foreign sales should cover at least 50%, and 70% is better. Smart financiers also distribute their risk across multiple pictures. A $5 million investment will buy participation in several films-- not just one. Fortunately for the independent producer, these investors will also understand that indies are not majors and will not look at results garnered by the majors in their financial modeling. DISCLAIMER: The information provided here is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Many of the legal principles mentioned might be subject to exceptions and qualifications, which are not necessarily noted in the answers. Furthermore, laws are subject to change and vary by jurisdiction.