Program Summary

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 44% 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 $100,000 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%	Production expenditures must be made in Alaska.
Alaska Hire	+ 10%	Wages paid to Alaska residents receive an additional 10% credit.
Seasonal	+ 2%	Production expenditures made between Oct. 1 and Mar. 30 receive an added 2% credit.
Rural Location	+ 2%	Production expenditures made in a rural area also receive an added 2% credit.
Maximum Possible Credit	44%	Portions of a production with an Alaska crew, filmed in rural Alaska between October and March.
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.

Program Changes Effective July 1, 2013

In 2012 the Alaska Legislature passed legislation (SB23) that will extend the Alaska Film Production Tax Credit Program through 2023. Signed into Law by Governor Parnell on May 30, 2012, this legislation provides an additional $200 million in tax credits and makes other changes to the program that will go into effect on July 1, 2013. Current program provisions remain in effect through June 30, 2013.

    Click here for information about the program transition.

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 made in Alaska during a consecutive 24-month period.

Here are the steps you take to use Alaska's incentives:

1. Contact the Alaska Film Office (AFO) for information and forms (forms are available on the "Program Forms" tab above).
2. Submit the Pre-qualification packet to qualify your project for the tax credit. You must include your estimated Alaska expenditures, a detailed budget, your distribution plan and a script or synopsis of the project. Qualification is required prior to the beginning of production - expenses incurred prior to qualification may not be eligible.
3. Apply for and receive an Alaska Business License (out of state LLCs and Corporations must also register with the state). All productions must have a valid Alaska Business License during the eligibility period.
      Information on obtaining an Alaska Business License
4. Receive Qualification Notice for your project when AFO determines that it meets program requirements.
5. Accurately document all of your Alaska expenditures - to be eligible, all expenses must be paid in full.
6. Arrange for an Alaska CPA (approved by the AFO) to verify your Alaska expenditures (information is available on the "CPA Verification" tab above).
7. Submit the final application form and materials after production is complete. As part of the final Application package, a rough cut (or final edited version) of the production is required. Once the AFO has verified that your project meets the requirements, a tax credit will be approved.
8. The Alaska Department of Revenue (DOR) will issue the actual tax credit. No additional review is required by DOR.
9. Sell your tax credit to any company that has a corporate income tax liability to the State of Alaska.

Forms (Click on the form name to download)

Contents
   Pre-Qualification
   Qualified Productions
   Final Application
   Dept. of Revenue

Pre-Qualification Form and Information

Pre-Qualification Form (This form was updated on 2/2/2012 please discard older downloads):
We offer 2 versions of the same form - pick the one that best matches your system.

 1) Excel Spreadsheet Pre-qualification Form
     (Recommended version - each page is on a separate tab - fill it out, print it and send it in)

 2) PDF Pre-qualification Form
     (Adobe typewriter has been enabled - fill it out on your computer, print it and send it in)

Business License: All entities doing business in Alaska are required to have a valid Alaska Business License - including film and television productions. 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.

Forms for Qualified Productions

Wages claimed for the additional 10% Alaska Hire Tax Credit
Only payments made through the production’s payroll system (with appropriate withholding of taxes etc.) to individuals in an employer/employee relationship are eligible for the added 10% Alaska Hire credit. Productions must provide verification of the residency status of all individuals who's wages are claimed for the 10% Alaska Hire credit.

    Alaska Residency Affidavit-FO (Version 1 - Fillable PDF Form)
    Alaska Residency Affidavit (Version 2 - typewriter enabled PDF file)
        (Completed form required for each of a production's Alaska resident employees claimed.)

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 (Version 1 - Fillable PDF Form)
    Non-Business Vendor - Residency Affidavit (Version 2 - typewriter enabled PDF file)
        (Completed form required for each non-business vendor claimed as an eligible expense.)

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 (Version 1 - Fillable PDF Form)
      Loan-Out Affidavit (Version 2 - typewriter enabled PDF file)
             (Completed form required for all Loan-Out Company payments claimed as expenses.)

Forms for use with Final Application

Final Tax Credit Application Form (the form was updated on 2/2/2012, please discard older downloads):
We offer 2 versions of the same form - pick the one that best matches your system.

 1) Excel Spreadsheet Tax Credit Application Form
     (Recommended version - each page is on a separate tab - fill it out, print it and send it in)

 2) PDF Tax Credit Application Form
     (Adobe typewriter has been enabled - fill it out on your computer, print it and send it in)

Productions are required to provide a "Sworn Certification of Compliance" with their final application:
 (to indicate that the production complied with applicable laws & regulations)
      Sworn Certification of Compliance (pdf file)

Department of Revenue Form

Credit Transfer Form:
    Film Production Tax Credit Transfer Form (pdf file)

Statutes and Regulations:

The Alaska Film Production Incentive Program is based on legislation passed in 2008.
   The enabling legislation is available on the Alaska Legislature's website.

The Alaska Film Production Incentive Program's statutory basis is in 2 titles:
 AS 43.98 (Revenue) and AS 44.33 (Commerce, Community and Economic Development).
    - View the full text of the applicable Alaska Statutes here (pdf file)

Regulations governing the Alaska Film Production Incentive Program are found in 2 titles of the Alaska Administrative Code (AAC):
  Title 3 – Commerce, Community and Economic Development (Approved in June 2009)
  Title 15 – Revenue (Approved November 2010)
    - View the full text of the regulations 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.
          4) Have attended a CPA training offered periodically by the AFO.

Once a CPA meets the criteria, they are identified below and 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 production’s 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 approved CPAs.

CPAs approved to perform Expense Verifications:

Altman, Rogers & Co. Karen Rogers Anchorage tel: (907) 274-2992 karenr@altrogco.com		Beltrami & Associates PC, CPA's Marja Beltrami Anchorage tel: (907) 345-9695 Mbeltrami@spenardcpas.com
KPMG Maria Keating Anchorage tel: (206) 913-4205 mtkeating@kpmg.com		Mikunda, Cottrell & Co. Jacy Petersen Anchorage tel: (907) 278-8878 jpetersen@mcc-cpa.com
Newhouse & Vogler, CPAs Steve Vogler Anchorage tel: (907) 258-7555 steve@newvog.com		Robert M. Thaggard, CPA Robert Thaggard Palmer tel: (907) 841-0279 robert@rmtcpa.com
Swalling & Associates, PC Gary Dixon Anchorage tel: (907) 563-7977 g.dixon@swallingcpas.com		Thomas, Head & Greisen PC Debra Mason Anchorage tel: (907) 272-1571 debram@thgcpa.com

Questions about the incentives:

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 AFO 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

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.

Is inter-state travel booked through an Alaskan travel agency eligible for 100% of the credit?

   No. Inter-state (to and from Alaska) travel is credited at 50% regardless of who arranges the travel. The advantage of using an Alaska-based travel agent is that agency fees would be eligible.

Are above the line salaries eligible for the tax credit?

   Yes - at the 30% base rate. If the individual is an Alaska resident, their wages or salaries are eligible for an additional 10%.

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.

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

   In the Statute that established the incentive program:

  AS 44.33.236. Determination of qualified expenditures.
    (a) Expenditures made by a production company 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, sound mixing,
       and special and visual effects;
       (10) the total aggregate payroll for services performed in Alaska, 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 Alaska;
       (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 in cooperation with the
       Department of Revenue.
     (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.

Can the Alaska Film Office "broker" my tax credit?

   No - the AFO can't act as a tax credit broker. However, we have a list of businesses who are interested in talking to producers about their Tax Credits. The current list is provided to qualified productions and again when a tax credit is issued.