SC State Film Incentives
By Patra Taylor
For many moons, South Carolina’s lush landscape has played host to a variety of film productions. From the foothills of the blue ridge mountains to the steamy coast, South Carolina offers a panoply of locations ripe and ready to make their screen debut.
Cash is King...
South Carolina offers many forms of television and film production incentives. Generally, the incentive is a cash rebate, not a tax credit involving brokers and a waiting period. Estimated rebate funds are reserved, assuring the availability of budgeted funds. As an added bonus, the rebate is assignable to a financial institution, bolstering everyday cash flow to film and television productions.
Currently, the state of South Carolina offers the following rebate incentives: **
25% on all in-state Wages;
20% on all out-of-state Wages;
30%+ on Supplies
Laying a foundation
Long term investment in motion picture facilities and projects is rewarded further by way of tax credits.
Investors in South Carolina-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 by the South Carolina Film Commission is required for all.
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 SC motion picture.
Credits are limited to $100,000 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.
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 $5,000,000 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 a given year.
Further, film production companies can use state owned properties fee-free for film locations.
South Carolina’s courting combination of cash rebates, tax credits and a quick cash turn around make South Carolina a wise choice to achieve the best value for your production.
With a little help from our friends...
Prior to the 2015 Legislative Session, the state did not allow the $15 million budget allocated for the film incentives to be carried over from one year to the next. “The money that wasn’t used during the year just went back to the state or to the department director to spend on other items”, said Duane Parrish, Director of the S.C Department of Parks, Recreation and Tourism, the state agency that oversees the S.C. Film Commission, in an article published in the Charleston Business Journal in December of 2015. “The most the commission ever actually spent in a single year was $12.3 million” Parrish said.
A new proviso passed in the 2015 session allows those funds allocated in one year to carry over to the next year. “It doesn’t give the film office more money, but it allows it to be able to use the monies that are allocated there” he said.
“We’ve been to LA (Los Angeles) on numerous trips now to try to get ourselves in the game, for lack of a better word,” Parrish said. “One of our big limitations is, despite the fact that we don’t have a lot of money compared to other states — we have $15 million — we have never given out all of the money. This proviso rectifies that.”
In addition to the rollover proviso, the general assembly saw fit to convert the $15 million incentive budget from a proviso to a recurring budgetary expense by statute. “A proviso is a temporary funding mechanism that must be voted on year by year.” said John DeWorken, of The Sunnie and DeWorken Group, a pro-business government relations firm in South Carolina. Engaged by the industry group, Carolina Film Alliance, Mr. DeWorken and Ms. Harmon successfully lobbied the legislature to make the funds for film incentives in S.C. permanent.
South Carolina’s $15 million budget is much smaller than the budgets of several other Southeastern states that compete with South Carolina for films projects. “We’re very low dollar- wise. To me, that’s our biggest issue. $15 million is just not a lot of money to be paying productions,” Parrish said. “Even with the proviso, if we’re successful, we’re still likely to run out of money.”
(Trickle) Down and Out in the Private Sector
Inarguably, films bring jobs. Governor Nikki Haley and the South Carolina General Assembly boast regularly of their dedication to the creation of jobs and broader economic development efforts in the state.
Currently, 37 states have some form of incentive packages for films that come to their state. Naturally, the goal is to attract production activity and create jobs. Film tax credit and rebate programs create both short-term and long-term economic and fiscal benefits that extend far beyond the production activities that qualify for the credit. These benefits include increased tourism, income for small businesses and development of film industry infrastructure.
The most successful incentives are those that seek to create a sustainable film industry. With the addition of film industry infrastructure such as studios and resident crew, a greater share of movie spending will accrue to residents and in-state suppliers. As the industry develops over time, this infrastructure will support the long-term goal of creating jobs and incomes for state residents.
A comprehensive benefit-cost analysis of film credits should compare tax credit costs to both private sector benefits (additional in-state jobs and income) and public sector benefits (higher state and local taxes from a stronger economy), not just the net change in state tax collections.It can be argued that the key objective to competitive film incentives is increased employment and higher incomes in the film and related ancillary industries.
Further, the tourism benefit that accrues with companies and out-of-state workers (who are required to file and pay income taxes in S.C.) purchase of goods and services (hotel rooms, restaurants, etc.) is immediate.
Back to the Future...
Prior to the popularization of competitive film incentive packages, S.C. hosted a record number of film productions in the state. From 1993 to 1996 films made in the state totaled 45.
Conversely, the past four years only saw 15 films come to S.C.
As a result of the increased incentive package, recent changes to the funding mechanism, and an improved economy, many predict a boom in film production in the state.
Sometimes history repeating itself can be a good thing...
** For the full incentive package details, please visit the website of the S.C. Film Commission,
Catherine Scurry is the former Taxpayer Rights Advocate for the S.C. Department of Revenue. She lives in Mt. Pleasant, SC and writes on occasion.
Tom Clark, Director, SC Film Commission (left) and Duane Parrish, Director, SC Dept. of Parks, Recreation and Tourism (right).
John DeWorken and Sunnie Harmon/The Sunnie and DeWorken Group.
Lifetime’s all-time #1 rated series “Army Wives” chose the Lowcountry of SC in large part for it’s competitive incentive package. Photo by Dan Littlejohn/ABC studios.