Form Rpd-41229 - Application For Film Production Tax Credit (Page 5 of 6) in pdf

STATE OF NEW MEXICO - TAXATION AND REVENUE DEPARTMENT

RPD-41229

Application for Film Production Tax Credit Instructions

Rev. 11/04/2013

Continued

Page 4 of 5

able to the production shall be considered a direct produc-

employed by the vendor in the approved positions, which

tion expenditure) provided that only the first $100 of the daily

equates to 2-1/2% of the respective total direct production

expenses of leasing a vehicle for passenger transportation on

expenditure and which is allocated to New Mexico public

roadways in the state may be claimed as a direct production

education institutions that administer at least one industry-

expenditure;

recognized film or multimedia program.

g. Food or lodging provided that only the first $150 of

Limit for Performing Artists: The film production tax credit

lodging per individual per day is eligible to be claimed as a

is limited to $5,000,000 for the direct production expenses

direct production expenditure;

attributable to services rendered by all performing artists in

h. Commercial airfare if purchased through a New Mexico-

a production.

based travel agency or travel company for travel to and from

New Mexico or within New Mexico that is directly attributable

"Film production company" means a person that produces

to the production;

one or more films or any part of a film.

i. Insurance coverage and bonding if purchased through

"Physical presence" means a physical address in New

a New Mexico-based insurance agent, broker or bonding

Mexico from which a vendor conducts business, stores inven-

agent, and

tory, or otherwise creates, assembles, or offers for sale the

j. Other direct costs of producing a film in accordance

product purchased or leased by a film production company.

with generally accepted entertainment industry practice.

"Postproduction expenditure" means an expenditure for

A direct production expenditure does not include:

editing, Foley recording, automatic dialogue replacement,

1. A gift with a value greater than $25;

sound editing, special effects, including computer-generated

imagery or other effects, scoring and music editing, begin-

2. Artwork or jewelry, except that a work of art or piece of

ning and end credits, negative cutting, soundtrack produc-

jewelry may be direct production expenditure if:

tion, dubbing, subtitling or addition of sound or visual effects;

a. It is used in the film production; and

but not including an expenditure for advertising, marketing,

distribution, or expense payments.

b. The expenditure is less than $2,500

3. Entertainment, amusement or recreation; or

Direct production and postproduction expenditures may

not exceed the cost of goods and services in an arm's

4. Subcontracted goods or services provided by a vendor

length transaction.

when subcontractors are not subject to state taxation, such

as equipment and locations provided by the military, govern-

Direct production and postproduction expenditures

ment, and religious organizations.

exclude:

For a production that starts it's principal photography on or

(a) expenditures for which the film production company has

after January 1, 2014, a direct production expenditure also

delivered a nontaxable transaction certificate (NTTC) Type

does not include a service provided by a person who is not a

16 pursuant to 7-9-86 NMSA 1978. Type 16 NTTCs may be

New Mexico resident and employed in an industry crew posi-

executed by a qualified production company to purchase

tion, excluding a performing artist, where it is the standard

property, lease property or purchase services that qualify

entertainment industry practice for the film production company

as production costs;

to employ a person for that industry crew position, except

(b) expenditures that are not subject to tax by New Mexico; and

when the person who is not a New Mexico resident is hired

or subcontracted by a vendor; and when the film production

production tax credit.

company, as determined by the division and when applicable

in consultation with industry, provides:

"Film" means a single medium or multimedia program, ex-

cluding advertising messages other than national or regional

a. Reasonable efforts to hire resident crew; and

advertising messages intended for exhibition, that:

b. Financial or in-kind contributions toward education or

• is fixed on film, digital medium, videotape, computer disc,

work force development efforts in New Mexico, including at

laser disc or other similar delivery medium;

least one of the following:

• can be viewed or reproduced;

(1) A pre-approved workshop,

• is not intended to and does not include sexually oriented

(2) On-set shadowing per each approved position, or

material harmful to minors or does not otherwise violate

(3) Ten percent of the portion of the tax credit attribut-

a provision of Chapter 30, Article 37 NMSA 1978, and

able to the payment or services provided by non-residents

• is intended for reasonable commercial exploitation for the

Form Rpd-41229 - Application For Film Production Tax Credit Page 5

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