Incentive FAQs



Additional information from the SC Department of Revenue can be found here.

How does the South Carolina Rebate work?

Are the incentives in the form of tax credits?

How much is the film and television production incentive?

Are there any caps?

Do you offer Sales Tax Exemptions?

How do the Sales Tax Exemptions work?

What’s the minimum threshold to qualify?

What if I cannot spend $1 million dollars in SC on my film?

Must I apply to become qualified to receive the SC cash rebate?

What form do I need to fill out to apply for the incentive?

How long does the incentive application review process take?

May a production company apply mid-production for a partial film credit?

When must SC production activities begin - once I have been approved to receive SC’s cash rebate?

Must I register my production company in the State of South Carolina?

Do I have to complete my project by year-end?

Do commercials qualify?

Do reality TV series qualify?

Does SC allocate a certain amount of money that can be used for the rebate program each year?

Is there a sunset clause in the SC incentive legislation?

Who qualifies for a 25% cash rebate in SC?

Is above the line talent covered as well as below the line?

Must all hires be South Carolina Residents?

How is a South Carolina Resident defined?

Do you accept loan outs?

Are there restrictions on the amounts paid to any employee?

What if I take a South Carolina crew to another state?

May a production company use a payroll service company to perform the SC withholding required to receive the cash rebate on wages?

May a motion picture company obtain a cash rebate for payments made to a loan-out corporation (or personal service corporation) when a payroll service company does the withholding and, what is the proper procedure?

Do employer-paid payroll expenses that are not included in the gross salary payment to the employee (e.g., SUTA/FUTA, FICA, workers compensation, health insurance, pension contributions) qualify for the payroll and production expense credits?

Are box rental expenses paid to employees eligible for the SC rebate?

Does a production company that fails to withhold or insure that the loan out corporation or personal services company withholds the proper amount still get the rebate?

Do “pass through's” qualify?

Does the rental of specialized motion picture equipment from a vendor located outside SC qualify for the rebate?

Are kit or box rental expenses paid to employees eligible for the SC rebate?

I heard that your supplier rebate is more like 37%. What does that mean?

Who performs the audit?


How much is the audit?

How does your audit work?

When do I get my cash?

Do you offer Tax Credits as well?








The SC Film Incentive Program: CASH REBATES


How does the South Carolina Rebate work?

First, we pay cash! South Carolina sends you a check at the end of production. No bartering or fiddling around with credits or filing tax returns.

If your film will spend a minimum of one million dollars ($1,000,000) in South Carolina (vendors, crew, extras, actors) and is financed, contact the SC Film Commission at 803.737.0498 to discuss your options before you begin filming.


Are the incentives in the form of tax credits?

NO! We pay CASH. If you qualify, we send you a check within 30 days of the close of your accounting department.


How much is the film & television production incentive?

For qualifying productions a 30% Supplier Rebate is based upon your total in-state expenditures with SC suppliers. All other suppliers are subject to a 5% reduction. Also, a 25% Wage Rebate is available for all resident wages subject to SC tax, and 20% for non-residents, including all actors and stunt players, no matter their state of residence.


Are there any caps?

The Wage Rebate is capped at the first $1,000,000 of earnings taxed in SC per individual.

There is no cap on the amount a production can receive.

There is an annual cap on the amount of rebate funds available per year. Generally, there is a minimum of $15,500,000 available in rebate funds per fiscal year (July 1 to June 30). The Rebate Fund is replenished each July 1st.


Do you offer Sales Tax Exemptions?

Besides using SC suppliers to receive a 30% cash rebate, your production may be exempt from SC sales and accommodations taxes, which could mean up to an additional 7.5% savings.


How do the Sales Tax Exemptions work?

After your application is accepted, register with the Secretary of State and Department of revenue, and receive a tax exemption certificate which exempts your production company purchases from SC sales and use tax at point of purchase. This exemption includes goods, services, hotel tax, some rental car taxes and the like.


What’s the minimum threshold to qualify?

You must spend at least $1,000,000 in SC. If you are not able to spend this amount, you may still qualify for exemption from SC sales and use taxes, saving your Production up to 7.5% on supplies purchased in SC (see next question for more details).


What if I cannot spend $1 million dollars in SC on my film?

A production company planning to spend $250,000 in SC within twelve (12) consecutive months may receive an exemption from all state sales, use, and accommodations taxes on goods and services purchased, leased, or rented for production by the production company. Granting the exemption from state sales, use, and accommodations taxes is at the sole discretion of the Department of Parks, Recreation & Tourism. If applicable, the sales and use tax exemption will be effective as of the date of approval of the production company’s application by the Director or his or her designee.


Must I apply to become qualified to receive the SC cash rebate?

Yes, you must apply and be approved for the film incentives before you begin filming. Contact the Film Commission to discuss your project and receive an application. 


What form do I need to fill out to apply for the incentive?

First, make sure your production company will spend at least $1,000,000 in South Carolina. You must meet this threshold by the end of production. When you are green-lit, call the Film Commission to discuss your project. If your project qualifies, SC reserves your rebate funds based upon your estimated SC production expenditures, and that money is not available to any other production.


How long does the incentive application review process take?

The process may take up to 15 business days.


May a production company apply mid-production for a partial film credit?

No. A production company must estimate that it will spend a minimum of $1,000,000 in one calendar year (365 day period) in SC, apply for and be approved for the SC cash rebate. Once approved, the Film Commission reserves this amount until completion of production to guarantee that the funds are ready within 30 - 45 days of final agreement on expenses. Then we send a check for the rebate to you.


When must SC production activities begin - once I have been approved to receive SC’s cash rebate?

Generally within 60 days after application approval.


Must I register my production company in the State of South Carolina?

Yes. All productions doing business in SC must be registered with the South Carolina Secretary of State.


Do I have to complete my project by year-end?

You have one calendar year (365 days) to complete your production to qualify for our rebate.


Do commercials qualify?

Yes, as long as they meet the $1,000,000 spending requirement. Like films, the state requires an audit to verify expenditures.


Do reality TV series qualify?

Unscripted / Reality TV series are not eligible. 

PROGRAM FUNDING

Does SC allocate a certain amount of money that can be used for the rebate program each year?

There is an annual cap on the amount of rebate funds available per year. Generally, there is a minimum of $15,500,000 available in rebate funds per fiscal year (July 1 to June 30). The rebate fund is replenished each July 1st.


Is there a sunset clause in the SC incentive legislation?

No.


WAGE REBATE

Who qualifies for a 25% cash rebate in SC?

A production company may receive a rebate on the money spent on resident wages directly associated with the production in South Carolina and subject to South Carolina withholding tax. 

In order to qualify for the Wage Rebate, a production company’s total production costs in SC must exceed $1,000,000 (one million dollars) in a single taxable year. For wages to qualify for the rebate the individual must qualify under the Motion Picture Incentives Act and the individual must have had South Carolina income tax withholding withheld and remitted to the Department of Revenue.

Only those wages that are subject to South Carolina withholding tax are eligible for the Wage Rebate. An individual is only liable for income taxes for personal services actually performed in South Carolina and is only subject to income tax withholding on payroll paid while that individual is working in South Carolina. Therefore, the Wage Rebate is available only for wages attributable to work performed while an individual is actually working in South Carolina.

Is above the line talent covered as well as below the line?

Yes. Compensation for payments up to the first $1,000,000 made to above the line personnel, such as producers, directors,writers, and actors, may be qualified if subject to SC taxation.


Must all hires be South Carolina Residents?

No. However, you maximize your wage rebate if they are. The SC resident rebate is 25% of your SC payroll subject to SC tax. You also may receive a 20% rebate for actors and stunt players - no matter where they are from.

How is a South Carolina Resident defined?

In order to qualify for the maximum twenty-five percent (25%) Wage Rebate, each South Carolina resident employed in the production of a feature length film, video, commercial, or television production that does not qualify as a television series must complete a Declaration of Residency form and provide proof of residency, which is one of the following:
  • Valid South Carolina driver’s license, or;
  • Current South Carolina voter registration card, or;
  • Copy of last year’s South Carolina personal income tax return
Do you accept loan outs?

Yes. Loan out payments qualify. Your payroll company is required to pay withholding taxes of 2% on each individual’s SC compensation.

Are there restrictions on the amounts paid to any employee?

Total payments to any one employee are capped for the purposes of our cash rebate at $1,000,000.

What if I take a South Carolina crew to another state?

The wage rebate is based upon taxable wages paid for services performed in SC.


May a production company use a payroll service company to perform the SC withholding required to receive the cash rebate on wages?

The SC Film Commission and the SC Department of Revenue will treat a payroll service company as the employer of record for all state and federal income tax purposes, provided that the motion picture production company contracts with the payroll service company to carry out withholding responsibilities and that the company properly registers with the SC Department of Revenue and the SC Secretary of State. There are required accounting and payroll forms in Excel that the SC Film Commission requires. The State and Federal withholding is done with standard forms.


May a motion picture company obtain a cash rebate for payments made to a loan-out corporation (or personal service corporation) when a payroll service company does the withholding and, what is the proper procedure?

Payments to a loan-out corporation, rather than to an individual employee, qualify for the SC rebate. This can be handled two ways:
  1. The Loan Out corporation may register in SC and must withhold and remit a portion of the individual’s wages, 
  2. The payroll company may withhold 2% of the individual’s wages. 

Do employer-paid payroll expenses that are not included in the gross salary payment to the employee (e.g., SUTA/FUTA, FICA, workers compensation, health insurance, pension contributions) qualify for the payroll and production expense credits?

No, unless they exceed the Federal tax limit and are subject to SC taxation.


Are box rental expenses paid to employees eligible for the SC rebate?

Resident crew only.


Does a production company that fails to withhold or insure that the loan out corporation or personal services company withholds the proper amount still get the rebate?

No. Taxes must be withheld in order for the production to claim the SC rebate.


SUPPLIER REBATE

What qualifies for 30% cash rebate in SC?

A production company spending at least $1,000,000 in South Carolina may receive a thirty percent (30%) rebate on goods and services acquired in the State from a South Carolina Supplier.

The Supplier Rebate is personal to the production company.

3. Eligible Purchases

The intent of the Act and these policies and procedures is that South Carolina Suppliers are to be used at all times. Only South Carolina Supplies purchased from South Carolina Suppliers will be eligible for the Supplier Rebate of 30 per cent.

To qualify as a South Carolina Supplier for the purposes of the SC Motion Picture Incentive Rebate:

1. The entity must have a retail business with a physical address in South Carolina. A qualifying retail business will include the following:

• a physical address with a storefront and sign that is not located at the production site

• posted and maintained normal business hours

• paid and supervised employee(s) working a minimum of 36 hours a week who typically devote all of their workday to performing services for the company in SC

• Registration with the SC Secretary of State if required to do so by law

2. From the business address/storefront, the vendor must conduct business, keep related inventory, and offer for sale the product purchased or leased by a film production company.

3. The vendor must be registered to pay South Carolina income tax, withholding tax, property tax, and sales tax, if applicable.

4. One year prior to production, companies must be in business and evidence an intent to be permanently domiciled in South Carolina.

5. A vendor that acts as a conduit to enable transactions to qualify that would not otherwise qualify for the motion picture supplier rebate shall not be considered a SC vendor with respect to those purchases and rentals.

To the extent that a purchase is made from someone other than a South Carolina Supplier, that expenditure is subject to a 5 per cent reduction from the 30 per cent rebate.

Related party transactions will be subjected to enhanced scrutiny and will not be permitted if the parties are attempting to qualify expenditures for the Supplier Rebate that would not otherwise be qualified. A “related party” is related to an entity if:

• The party is an associate of the entity.

• The party is, directly or indirectly, either under common control with the entity or has significant or joint control over the entity.

• The party is a close family member of a person who is a part of key management personnel or who controls the entity.

• The party is controlled or significantly influenced by a member of key management personnel or by a person who controls the entity.

• The party is a joint venture in which the entity is a venture partner.

• The party is a member of an entity or its parent's key management personnel.

A “South Carolina Supply” is an item or service typically subject to South Carolina sales tax and obtained by the production company from a South Carolina Supplier. In addition to items subject to South Carolina sales tax, the following items and services are also eligible for the Supplier Rebate if provided by a South Carolina Supplier:

• Rent and leases, if the property to be leased or rented is physically located in South Carolina, and personal to the production company only; leases to an individual working for the production company do not qualify.

• Domestic airfare from one’s home base to SC and return qualifies when booked through a SC based travel agency. Only commercial flights, where all legs are under one booking, qualify. Charter flights within SC may qualify.

• Location fees

• Insurance coverage if purchased through a South Carolina-based insurance agent.

• Set clean-up services

• Casting services

• Kit/box rental from SC resident crew

• Per diem

• Stipend

• Postproduction editing, effects, graphics, and audio services, for services performed in South Carolina and subject to taxation by the State of South Carolina, if these expenditures are directly attributable to the production.

• Utilities, obtained from a private vendor

Ineligible Items include, but are not limited to:

• Labor expenditures already claimed by another exemption, credit or rebate.

• Any personnel or labor expenditures, however structured or classified.

• State unemployment tax, FICA, and Federal unemployment taxes. See Wage Rebate for additional information.

• Payments made to Federal, State, County, and Local governments for licensing or taxation.

• Trade group or union dues

• Personal health services, gifts, or expenditures

Fees paid to persons not actively involved in physical production of a qualified production such as producers, production executives, and others normally considered part of studio business unit.

• Payment of principal, prepaid interest, finance or service charges, points, fees, commissions, and all other charges paid to any bank or any other financial institution, payroll service company, or any other person relating to any loan of money or entity or other financial transaction.

All expenditures and the Supplier Rebate Request must be filed with the Film Commission and the Film Evaluation Committee prior to the departure of the production company from South Carolina. In addition, all supplier expenditures must be audited, with a company accounting representative present to answer any questions, before the South Carolina production office closes. Failure to do so may result in disqualification for the Supplier Rebate.

The production company must provide a complete vendor list to the Film Commission.

Any scouting expenditures incurred or contracted for in South Carolina by the production company sixty (60 ) calendar days or less prior to the approval of the application may be eligible for reimbursement.

The Supplier Rebate may not be used to reimburse any personnel expenditures, however structured or classified.

The Supplier Rebate is available only for those purchases that are made at fair market value in arms length transactions.

Only actual expenditures paid shall be qualified expenditures, not outstanding accounts. Purchases over $5,000 (five thousand dollars) for real or personal property are subject to review and any rebate may be prorated based on the use of the real or personal property in the film.

How do I know if it’s a “South Carolina Spend?”

A “South Carolina Supply” is an item or service typically subject to South Carolina sales tax and obtained by the production company from a South Carolina Supplier.

To qualify as a South Carolina Supplier for the purposes of the SC Motion Picture Incentive Rebate:

1. The entity must have a retail business with a physical address in South Carolina. A qualifying retail business will include the following:

• A physical address with a storefront and sign that is not located at the production site

• Posted and maintained normal business hours

• Paid and supervised employee(s) working a minimum of 36 hours a week who typically devote all of their workday to performing services for the company in SC

• Registration with the SC Secretary of State if required to do so by law

2. From the business address/storefront, the vendor must conduct business, keep related inventory, and offer for sale the product purchased or leased by a film production company.

3. The vendor must be registered to pay South Carolina income tax, withholding tax, property tax, and sales tax, if applicable.

4. One year prior to production, companies must be in business and evidence an intent to be permanently domiciled in South Carolina.

5. A vendor that acts as a conduit to enable transactions to qualify that would not otherwise qualify for the motion picture supplier rebate shall not be considered a SC vendor with respect to those purchases and rentals.


I spent money in South Carolina to scout locations before applying for the incentives. Can I claim these expenditures?

Yes. Any scouting expenditures incurred or contracted for in SC by the production company sixty (60) calendar days or less prior to the approval of the application may be eligible for reimbursement.


Do insurance expenses, loan fees, completion bond expenses and interest expenses incurred in connection with the production of a film qualify for the production expense credit?

Insurance expenses qualify if obtained from a South Carolina company. Loan fees, completion bond expenses and interest expenses do not qualify for the production expense credit, regardless of the location of the lender, insurance company or completion bond company.


Do living expenses and travel expenses such as airline tickets for motion picture employees flying in and out of South Carolina, incurred during the pre-production, production or post-production of a motion picture qualify for the production expense credit?

Domestic airfare from one’s home base to SC and return qualifies when booked through a SC based travel agency. Only commercial flights, where all legs are under one booking, qualify. Charter flights within SC may qualify.

Production company expenditures for lodging, food and other expenses qualify for the SC rebate, including those scouting expenses incurred 60 days before the production.

The only “spend” that is credited toward the rebate is that which is spent in SC.


Does "local spend" include bond fees and insurance?

Insurance?  Yes, if obtained from a SC supplier. 
Bond Fees? No.


Do equipment purchases outside of South Carolina used directly in the production of the motion picture qualify for the 30 per cent cash rebate?

The rebate for purchaes or rentals made from out-of-state, or from a non-qualified SC vendor is 25%


Do archival material costs, fees for stock footage, or costs for licensing footage from another production entity or from an archival source constitute qualifying production expenses?

Yes, if they are purchased from a SC supplier.


Do payments to shipping companies count as qualifying expenses? (FedEx, DHL, UPS?)

Yes, to the extent that the service is obtained from a SC supplier. If the shipments are made to and from the SC production office, they qualify.


Do “pass throughs” qualify?

Pass through company transactions are not eligible for the SC cash rebate.


Does the rental of specialized motion picture equipment from a vendor located outside SC qualify for the rebate?

Yes, at 25%.


Are kit or box rental expenses paid to employees eligible for the SC rebate?

Only resident SC crew kit / box rental qualifies at 30%.


TAXES

I heard that your supplier rebate is more like 37%. What does that mean?

Any production spending over $250,000 in SC and qualified by the SC Film Commission may apply for tax exempt status. All films approved for our rebates spending more than $1,000,000 in SC are automatically exempt from sales and use tax. That means you pay no sales and use tax at the point of purchase. In some cases this could save you an additional 8% on purchases such as hotel rooms, and also includes 5% on rental cars, 3% on heavy equipment; any sales and use tax administered by the SC Department of Revenue.


AUDITING PROCEDURES

Who performs the audit?


The State of SC provides an auditor to the production while in SC.


How much is the audit?

The audit is free of charge.


How does your audit work?

We send our auditor to your SC production office at no expense to your company. It is a progressive audit. Your production accountant emails your first wage and spend reports in Excel via email within two weeks of the opening of the production office. Updated reports are emailed weekly. This does two things: We audit your spend to help assure that (1) you are gaining the maximum value from our program and (2) your rebate checks are received as soon as possible.

After our auditor reviews spending reports, he will schedule a time to come to your SC office to verify wage and supplier expenditures. He will review receipts and ask questions as necessary. These on-site audits happen about every two weeks or so, depending upon cash flow. The final audit reviews only the last two weeks of spend, so figuring out your cash rebate is completed quickly once your production wraps.


RECEIVING MY CASH REBATE

When do I get my cash?

Once the production company has completed all production-related work in South Carolina, the auditor, production accountant and executives will agree on the amount spent on wages and suppliers – and the rebate amounts that may be due- in SC.Usually within 30 - 45 days of the close of the production office and final agreement on accounting, you will receive your check from SC.


SC PRODUCTION TAX CREDITS

Do you offer Tax Credits as well?

Yes, several, including credits for SC investors…..read on!

1. Tax Credits for the Creation of South Carolina Motion Pictures or Facilities

The investors in SC created motion pictures and/or production/post-production facilities are entitled to State income tax credits based upon their investment amount.

Application by the production company and certification before any activities begin and approval by the Department of Parks, Recreation & Tourism are required for all parties.


A. Motion Picture Project Tax Credit

A taxpayer may claim an income tax credit of up to twenty percent (20%) of the taxpayer’s cash investment in the development or production of a single South Carolina motion picture.
  • Credits are limited to $100,000 (one hundred thousand) per taxpayer
  • Unused credit may be carried forward fifteen (15) succeeding taxable years
  • All credits cannot reduce a taxpayer’s income tax liability by more than fifty percent (50%) for any given year
B. Production/Post-production Facility
  • A taxpayer may claim an income tax credit of up to twenty percent (20%) for the construction or conversion, or equipping, or any combination of these activities of a motion picture production or post-production facility.  Minimum investments in the facilities apply.
  • Total credits claimed by all taxpayers may not exceed $5 million in a single qualified facility.
  • Unused credit may be carried forward fifteen (15) succeeding taxable years.
  • All credits cannot reduce a taxpayer’s income tax liability by more than fifty percent (50%) for any given year.
2. Tax Credit for South Carolina Companies that produce Commercials

Production companies that produce commercials and that make a total base investment of more than $500,000 in filming commercials in the State during a calendar year are eligible for a State income tax credit equal to ten percent (10%) of the total investment made in South Carolina. The total amount allowed to all production companies each year cannot exceed $1,000,000.

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