Alaska: not just another pretty place

Alaska's Film Production Incentive Program

  •     Program Summary    
  •     Program Process    
  •     Program Forms    
  •     Statute & Regulations    
  •     CPA Verification    
  •     FAQ    

Program Summary

For detailed information on the Alaska Film Production Incentive Program, visit the Dept. of Revenue - Alaska Film Office website: tax.alaska.gov/AlaskaFilmOffice

The Alaska Film Production Incentive Program is an economic development initiative created to encourage growth of the film industry in Alaska. Applicants can qualify for up to 58% (and possibly more) in a transferable tax credit on qualified production expenditures in Alaska.

What projects are eligible?
Eligible projects are broadly defined as film, documentary, commercial, and video productions. A minimum of $75,000 of qualified expenditures in Alaska is required. Unlike some incentives, Alaska does not have a salary or project cap. Your company is not required to be domiciled in Alaska, nor is there a minimum requirement for principle photography days or for local hire. Alaska provides additional incentives for local hire, off-season production and filming in rural locations. Here is a summary of Alaska’s Film Tax Credit program:

Tax Credit Value Requirements
Base Credit 30% Ground spend expenditures incurred in Alaska receive the base 30 percent credit.
Alaska Resident Wages 50% Wages paid to Alaska residents receive an additional 20 percent credit for a total of 50 percent.
Non-Resident
Below-the-Line (BTL)
30% Wages paid to non-resident BTL personnel receive the base 30 percent credit.
Non-Resident
Above-the-Line (ATL)
5% + Compensation paid to non-resident ATL personnel receives a base 5 percent credit plus a dollar amount equal to 1/2 the Alaska Resident wages, in-state transportation and certain other expenses.
Rural Location + 6% Production expenditures incurred in a rural area receive an added 6 percent credit.
Seasonal + 2% Production expenditures incurred between Oct. 1 and Mar. 30 receive an added 2 percent credit.
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Possible Credit 58% + Portions of a production with an Alaska crew, filmed in rural Alaska between October and March.
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Episodic Scripted Television Credit 6% The first episodic scripted television production that completes sixteen (16) episodes will be eligible for an additional credit of 6 percent of their total qualified expenditures. (Only one production will receive this credit - all 16 episodes must be broadcast ready.)
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Note: Alaska has no personal income tax and no statewide sales tax, so our incentive program is just the tip of the iceberg of your possible Alaska savings.
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How does the program work?

The State of Alaska offers a film production incentive in the form of a transferable tax credit for qualifying production expenditures incurred in Alaska during a consecutive 36-month period.

Here are the steps you take to access Alaska's incentive program:

  • Contact the Alaska Film Production Promotion Program (AFPPP) or the Alaska Film Office (AFO) for information and forms.
  • Submit the Alaska Film Production Tax Credit Application for Qualification and other required materials for approval to qualify your project for the film tax credit. The application must include the estimated Alaska expenditures, a detailed budget, the distribution plan, a script or synopsis of the project, and proof that the applicant holds a current Alaska business license (Information on obtaining an Alaska Business License).
  • Pay the required application fee of .02 percent of your estimated qualified expenditures ($200 minimum / $5,000 maximum). Include the application fee when the application is submitted.
  • The Alaska Film Incentive Review Commission must approve all production applications before a notice of qualification is mailed to the producer.
  • Remember to document all of the Alaska expenditures. To be eligible, expenditures must be paid in full.
  • Arrange for a CPA to verify your Alaska expenditures. The CPA must hold an Alaska CPA license, have an Alaska business license, and be located in Alaska.
  • Submit the Alaska Film Production Tax Credit Final Application and other required materials after production is complete. As part of the final Application package, a rough cut (or final edited version) of the production is required. In addition, the Alaska Film Office logo is required in the production's credits.
  • The Alaska Film Incentive Review Commission must approve all final applications before a film tax credit will be awarded
  • The awarded film tax credit certificate is immediately available for purchase by a person or entity with a tax liability in Alaska. Utilization of a film tax credit is now available against eight state tax types.

This is a simplified program process. Please contact the Alaska Film Office or visit tax.alaska.gov/AlaskaFilmOffice for detailed information.

Forms

Contents
   General Information
   Forms for Productions Qualified before 7/1/2013

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General Information

Incentive program forms are available directly from the Dept. of Revenue - Alaska Film Office website:
http://tax.alaska.gov/AlaskaFilmOffice/programs/CreditProgram.aspx
(look for the "Forms" tab)


Please Contact the Alaska Film Office for more information:
  Alaska Film Office
  State of Alaska Department of Revenue - Tax Division
  550 West 7th Avenue, Suite 500 | Anchorage, Alaska 99501
  Telephone (907) 269-6620 | Fax (907) 269-6644

  Amy Franz, Accounting Technician
  Amy.Franz@alaska.gov | (907) 375-6478

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Business License: All entities doing business in Alaska are required to have a valid Alaska Business License - including film and television productions and all their vendors (including loan-out companies). LLCs and Corporations must be registered with the state in order to receive a business license. Information about obtaining an Alaska Business License is available at the
Alaska Division of Corporations, Business and Professional Licensing.

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Forms for Productions that Qualified prior to July 1, 2013

Please Note: These forms are only for productions that qualified under the "old" program - before 7/1/2013. All other productions should go to the Alaska Dept. of Revenue's website for current forms:
http://tax.alaska.gov/AlaskaFilmOffice/programs/CreditProgram.aspx

Wages claimed for the Alaska Resident Wage Tax Credit
Only payments made through the productionís payroll system (with appropriate withholding of taxes etc.) to individuals in an employer/employee relationship are eligible for the Alaska resident wage credit. Productions must provide verification of the residency status of all individuals who's wages are claimed for the Alaska resident wage credit.

    Alaska Residency Affidavit
        (Please contact the Film Production Promotion Program for this form)

Payments to non-business vendors
To be an eligible expense, vendors are required to have an Alaska Business License. However, occasionally an entity may provide goods and/or services to a production without being a business (e.g. a fee associated with a private residence used as a location). For that expense to be eligible, this affidavit must be completed and included with the expense's documentation.

    Non-Business Vendor - Residency Affidavit
        (Please contact the Film Production Promotion Program for this form)

Payments to Loan-Out Companies
To be eligible, compensation paid to an individual through a Loan-out Company must be thoroughly documented:

  • 1) The payment must be for compensation associated with an individual, and the compensation agreement and invoices must be attached to the affidavit below.
  • 2) The Loan-out company must have an Alaska Business License that is valid during the production's qualification period.
  • 3) Only compensation for work actually performed in Alaska is eligible; the amount of the compensation must be pro-rated accordingly.

      Loan-Out Affidavit
        (Please contact the Film Production Promotion Program for this form)

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Final Application form for projects qualified before 7/1/2013

Final Tax Credit Application Form for Productions that Qualified Prior to July 1, 2013
        (Please contact the Film Production Promotion Program for this form)

Productions are required to provide a "Sworn Certification of Compliance"
        (Please contact the Film Production Promotion Program for this form)

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Statutes and Regulations:

The Alaska Film Production Incentive Program is based on legislation passed in 2012.
   The enabling legislation is available on the Alaska Legislature's website.

The Alaska Film Production Incentive Program's statutory basis is in 3 titles:
 AS 43.98, AS 44.25 and AS 44.33.
    - View the full text of the applicable Alaska Statutes here (pdf file)

"Rural" has a specific meaning in this program.
    - View a list of Alaska Communities and their "rural" status
          (Also contains information on local taxes - pdf file)

Expense Verification for Productions

Verification of a production's expenses by an Alaska-licensed CPA is required before tax credits are issued.

To provide verification services for productions, CPAs must meet several criteria:
          1) Hold an Alaska CPA License.
          2) Have an Alaska Business License.
          3) Be located in Alaska.

Once a CPA meets the criteria, they are identified in our online Support Service listings.

CPAs are required to conduct production expense verifications according to the standards set by our current
         Compliance Guidance.

While a CPA's verification of claimed expenses is required, ultimately it is the productionís responsibility to prove that any expense claimed under the program is eligible. The film office developed a Q & A document with useful information about expenses and verification requirements.

Please contact the AFO if you have questions about the verification process or about CPAs.

Questions about the incentives:

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I have a project that will be filmed in Alaska and I think it will qualify for the tax credit, how do I start?

   Contact the AFPPP as soon as possible! We will walk you through the process & what forms are required etc. We're also available to clarify any questions you may have about the program. Phone: 907.269.8190 or alaskafilm@alaska.gov

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How do I know if a location is considered “rural” for the tax credit purposes?

   We have a list online - Rural Credit and Tax Info (pdf). For each community, the list notes whether or not it is classified as rural. If you have questions or need clarification on what constitutes rural, please don't hesitate to contact our office. This document also indicates the sales tax (if applicable), other taxes (if any), for each community as well as its location by borough and region.

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Is inter-state travel booked through a non-Alaska travel agency eligible for the credit?

   Yes. Costs of inter-state travel (to and from Alaska) is eligible regardless of who arranges the travel. However, the advantage of using an Alaska-based travel agent is that the agent's fees would also be eligible.

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Are above the line salaries eligible for the tax credit?

   Yes - Non-Resident above the line personnel receive a 5% base rate. All Alaska resident wages or salaries are eligible at higher rates.

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What about taxes? Are there credits against sales and income taxes?

   Yes - but, Alaska has no personal income tax and no statewide sales tax. However, there is a statewide vehicle rental tax. Some communities have local sales taxes and many also have a "bed tax" as well as local vehicle rental taxes. The good news is that the costs of state and municipal taxes are eligible expenses that may be claimed under the incentive program.

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Where can I find a list of what expenses are eligible?

   In the Statute that established the incentive program:

  AS 44.25.130. Determination of qualified expenditures.
    (a) Expenditures made by a production company licensed to do business in the state in connection with a film production approved by the film office that shall be considered qualified expenditures must be directly related to the production and be incurred in the state. Only expenditures that are ordinary, reasonable, and not in excess of fair market value and that are for real or tangible property, fees, services, or state or municipal taxes shall be considered.
    Expenditures may include:
       (1) costs of set construction and operation;
       (2) costs of wardrobes, make-up, accessories, and related services;
       (3) costs associated with photography and sound synchronization;
       (4) costs of lighting and related services and materials;
       (5) costs of editing and related services;
       (6) rental of facilities and equipment;
       (7) leasing of vehicles;
       (8) costs of food and lodging;
       (9) costs of digital or tape editing, film processing, transfer of film to tape or digital format, transfer
       of digital media to film or tape, sound mixing, and special and visual effects;
       (10) the total aggregate expenditures for services performed in the state, including all salaries, wages,
       compensation, and related benefits provided to producers, directors, writers, actors, and other personnel that
       are directly attributable to services performed in the state;
       (11) the costs of the use of an Alaska business for processing qualified payroll and related expenditures;
       (12) costs of music, if performed, composed, or recorded by an Alaska musician, or released or published
       by an Alaska business;
       (13) costs of intrastate travel, if provided by an Alaska business;
       (14) costs relating to the design, construction, improvement, or repair of a film, video, television, or
       digital production or postproduction facility or related property, infrastructure, or equipment, except
       commercial exhibition facilities, as determined by the film office;
       (15) costs of state or municipal taxes levied in Alaska on the lease or rental of passenger or recreational
       vehicles or the rental of rooms or other lodging; or
       (16) other similar production expenditures as determined by the film office.
     (b) Production costs that may not be considered qualified expenditures include:
       (1) costs related to the acquisition, determination, transfer, or use of a film production tax credit
       under AS 43.98.030;
       (2) postproduction expenditures for marketing and distribution;
       (3) production financing, depreciation, and amortization costs, and other costs that are not cash or cash
       equivalent expenditures directly attributable to production costs incurred in the state;
       (4) amounts that are later reimbursed or reasonably anticipated to be reimbursed, resulting in a reduction
       in production costs;
       (5) amounts that are reasonably anticipated to be recovered through subsequent sale or other realization
       of value by disposal of an asset that has been claimed as a qualified expenditure;
       (6) amounts that are paid to a person or entity as a result of participation in profits from the exploitation
       of the production;
       (7) costs incurred in the purchase of real or tangible property for which a qualified expenditure has, at
        any time, been claimed.

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Can you help "broker" my tax credit?

   No - the AFO and AFPPP can't act as a tax credit broker.

Other Questions?
Contact the Alaska Film Production Promotion Program: Call (907) 269-8190 or e-mail AlaskaFilm@alaska.gov

Alaska - not just another pretty place