The Film Office determines whether a project is eligible to apply for the Refundable Film Production Tax Credit, which includes determining the percentage of the credit that would apply to the qualifying expenditures for that project. Within 5 business days of receiving your project registration documents (see Project Registration Info. and Forms) a certification letter will be sent to production stating the approved refundable tax credit amount, determination if a CPA audit is needed and the fiscal year the tax credit is to be submitted / completed. This letter is required to receive the refundable tax credit.
ELIGIBLE PROJECTS: For projects to be eligible for the incentive, the following must apply:
The filing entity must be a “Film Production Company.”
The definition of a “Film Production Company” is “a person that produces one or more films or any part of a film”. This is the entity that is listed on the Film Office’s project registration that incurs the costs for the project and then files for the credit. The filing entity (“film production company”) cannot be tax-exempt (i.e. a non-profit organization).
The project must be a “film” or “commercial audiovisual product.”
“Film” means a single media or multimedia program, excluding advertising messages other than national or regional advertising messages intended for exhibition that is fixed on film, digital medium, videotape, computer disc, laser disc or other similar delivery medium; can be viewed or reproduced; is not intended to and does not violate a provision of Chapter 30, Article 37 NMSA 1978 (which relates to materials viewed by minors); and is intended for reasonable commercial exploitation for the delivery medium used. A “commercial audiovisual product” means a film or video game intended for commercial exploitation.
The production must be intended for exhibition and reasonable commercial exploitation. In other words, the project (or product) must be commercially viable – available to the public either via purchase or because media buys are in place. Examples include, but are not limited to, the intention for theatrical release, submission to film festivals for “pickup,” television broadcast, and certain media subscriptions, etc.
The following types of production will qualify as long as the statements above apply:
Television (MOW, pilots, series, reality)
Certain Commercials and EPKs*
Content-Based Mobile Apps
Standalone Post Production
Examples of types of projects that are not eligible: PSAs, print campaigns, trailers, promotional or marketing products, web design or development, live events or commissioned projects for a single client.
*See the additional requirements under Key Points Per Project Types below
Key Points Per Project Type: To assist in determining eligibility, below are additional considerations and requirements to the information provided above, as relates to specific project types:
Commercials: Commercials require a signed letter from the Ad Agency or Client, describing the relationship with the Production Company and confirming which entity is claiming the credit.
Regional – Proof of more than one media buy is required. (Reminder, PSAs do not qualify.)
National – Proof of national media buy is required.
Internet – Proof of a media buy (as equates to “ad space”) is required. Commercials only available on the client/owner’s website do not qualify as they are considered promotional.
EPKs may qualify if the production company filing for the EPK is not the company filing for the project featured in the EPK.
Content-Based Mobile Applications: Software products are not considered Mobile Apps for the purpose of this incentive. Information must be provided as to who owns the content and creative elements created for the App. The App must be available to the public via an “app store” or for purchase.
Documentaries: Be sure to apply for the credit each year in which expenses are incurred for the project, not at the project’s end.
Standalone Television Pilots: Pilots that are not going straight-to-series require a signed letter from Parent Company verifying the production is intending production of the series in New Mexico if the Pilot is “picked up” and ordered to series. If the Pilot is shot in NM but the first season is not shot in NM, the Pilot will not be eligible for the additional 5%. Exceptions may be considered by the Director under extenuating and unforeseen circumstances (e.g. re-casting).
Standalone Post Production: When projects are not shot in NM but Post Production services only are rendered here, a signed letter is required from the Client describing the relationship with the Post House and confirming which entity is claiming the credit. Standalone Post Production requires a separate Tax Agreement than other project types.
Television Series: For the additional 5% to apply to a Television Series, the Production Company must provide a title list of all episodes that have or will shot in New Mexico prior to submitting the tax application after production. The Pilot is considered as part of the minimum requirement of 6 episodes when production is shooting “straight-to-series.” For the additional 5%, the Parent or Production Company must also provide a NM budget per each episode in the order of 6, which may equate to a top sheet (per episode). This is needed to determine if the minimum budget requirement of $50k per episode will be met as a condition of eligibility.