Arizona's Motion Picture Production Program (MPPP) is a refundable tax credit program that allows production companies the opportunity to recapture a percentage of qualified production expenses spent in Arizona to produce more than 50% of their movie, television show, commercial, or music video at a Qualified Production Facility and/or at a Practical Location beginning January 1, 2023.
Overall, the program certification process involves (3) steps: applying for pre-approval, filing a 9th-month notification report, and applying for post-approval.
Links to the MPPP Rules & Guidelines and ACA Account Portal are provided below. We recommend that you REVIEW the HIGHLIGHTS section of the Motion Picture Production Program and Frequently Asked Questions (FAQs) below, BEFORE APPLYING.
TAX CREDIT ALLOCATION
Base Credit for Qualified Production Costs
Up to $10M (15%)
$10M to $35M (17.5%)
Over $35M (20%)
Additional Credit Bumps
2.5% of Labor Costs (Use of Arizona Resident Labor (Below-the-Line) “Production Labor” means all laborers working on a production that are not talent, writers, producers, or management.
2.5% of Production Costs (Qualified Production Facility Use) One of the following must occur:
- Use a Qualified Production Facility to produce the production in Arizona
- More than 50% of the production is filmed at a Practical Location in Arizona with all preproduction, postproduction, and editing completed at a Qualified Production Facility in Arizona
- Produced and filmed in association with a Long-term Tenant of a Qualified Production Facility in Arizona. “Long-Term Tenant” means a person that enters into a lease of at least five years for the use of a Qualified Production Facility.
Calendar Year 2024 - $100M
$75M (Qualified Production Facility)
$25M (Practical Location)
Calendar Year 2025 and each year thereafter - $125M
$100M (Qualified Production Facility)
$25M (Practical Location)
HOW TO APPLY
You'll need to create an account in the ACA Electronic Application system before you can apply. Please use the instructions below to assist you.
Create An Account
To create a new account, click the link to “Request Username & Password”
- Fill out the requested information under “REQUEST A USERNAME TO APPLY FOR INCENTIVES”
- For “Industry” select Arts, Entertainment, and Recreation
- For "Primary Program of Interest," select The Arizona Motion Picture Production Program
Once you submit this form, the financial incentives team will create your account, and send you an email from the ACA Help Desk with your unique username and a temporary password (please check spam or junk mail).
Login To Submit Pre-Approval Application
Login to the ACA’s Electronic Application System with this username and temporary password (both are case-sensitive). You will then be prompted to create your own "new password."
Once logged in, you're now ready to apply - click “Incentives.” Select Motion Picture Production.
- Complete the Motion Picture Production: Initial Application for Pre-Approval.
If you have any questions, please feel free to contact our Senior Program Manager, Financial Incentives, Cindy Grogan at 602-845-1221 or [email protected].
HIGHLIGHTS MPPP
(Provided below is a summarized version with additonal guidance to serve as an industry synopsis ONLY.) Please read the complete Rules & Guidelines here.
Eligible Projects
Movies, Television, Commercials, Music Videos
Fees
Application Fee: 1% of the pre-approved credit amount, not to exceed $100,000 (non-refundable)
Administrative Fee:1% of the pre-approval credit amount (The administration fee is refundable if the Authority is notified within 90 days from the pre-approval certification date that production will not commence.)
HOW TO QUALIFY (ELIGIBILITY)
To Qualify for the Base Tax Credit, production companies must EITHER:
1) Use a Qualified Production Facility in Arizona to produce the production
“Qualified Production Facility” means a structure that is built for film industry purposes, is located in this state, contains dedicated soundstage space that is at least ten thousand (10,000) contiguous square feet which may be partitionable, and meets generally accepted industry standards, including standards for soundproofing, lighting, air conditioning, and Motion Picture Production quality technology for producing, filming, or otherwise creating a Motion Picture Production.
OR
2) Film more than 50% of their project at a Practical Location in Arizona AND perform all Preproduction, Postproduction, and Editing at an Industry Standard Facility in Arizona, IF such a facility for those functions is available.
“Practical Location” means a physical location at which a Motion Picture Production is
filmed, that is not and that does not use an industry-standard sound stage or production
facility to produce and film the Motion Picture Production.
“Industry Standard Facility” means a facility that, in the judgment of the Authority, has the required equipment and capabilities that meet generally minimal requirements followed by establishments primarily engaged in producing motion pictures, videos, television programs, or commercial advertisement messages. These specialized capabilities may include but are not limited to mixing facilities, Automated Dialogue Replacement (ADR) rooms, screening facilities, flexible technical creative spaces designed to support picture, sound, visual effects, color or sound workflows, pre-production, and post-production support office spaces, secure data centers/technical hubs, operations support centers, and maintenance facilities, and is supported by appropriate power, connectivity, water, security, and related technical infrastructure. The Authority will maintain a non-exhaustive list of qualifying facilities for reference.
Exception to Industry Standard Facility Use: If the production believes an Industry Standard Facility is unavailable within the state, it may request in writing an exception to this requirement. An Industry Standard Facility will be deemed unavailable if: (I) consideration has been paid for its use or is currently under an agreement with an option for use by another business, entity, or person and, in either circumstance, such period of use includes the applicant’s estimated start date of principal photography; or (ii) such facility does not possess capacity, due to personnel or equipment, reasonably necessary to satisfy the pre-production, post-production or editing requirements of the Motion Picture Production Company.
AND
3) Maintain production labor force (Below-the-Line) in Arizona.
4) Meet the content restrictions set forth in A.R.S. §41-1517 (F)
5) Include on-screen credits (Not applicable to Commercials) to acknowledge the production was filmed in Arizona. (To request use of the Arizona Film Commission logo in your production credits, please register your wrapped project with Arizona Film & Digital Media. We'll send you a Credit Logo Release and provide you with the Logo, accordingly.)
6) Begin production within nine (9) months of your notice of pre-approval and include in your Daily Call Sheet email distribution list, the Director of Arizona Film & Digital Media, Matthew Earl Jones, [email protected].
FOLLOWING PRE-APPROVAL CERTIFICATION
Production - 9-Month Notification Report
Must enter production within 9 months of notice of pre-qualification status. To verify that production has begun and to avoid a lapse of certification, the production company must submit the 9-Month Notification Report via the ACA's Electronic Application System.
Call Sheet Submission eligiblity requirement: Please make sure to ADD the email of Director Matthew Earl Jones, [email protected], to your Daily Call Sheet email distribution list.
In general, the 9th Month Notification application process includes selecting 1 of the 3 options below to verify that production has commenced:
1.) Notice and declaration of Commencement of Principal Photography with an estimated
start date signed by the producer, the shooting schedule (when available).
2.) Documentation of its Arizona expenditure of the lesser of:
a. Ten percent (10%) of the estimated total Arizona budget of the pre-approved production.
b. Two hundred fifty thousand dollars ($250,000).
3. A Certificate of Insurance for the pre-approved Motion Picture Production. In addition, the Motion Picture Production Company must provide one of the following to the Authority:
a. A copy of a contract, loan out agreement, or deal memo with cameraperson(s) and crew.
b. A copy of the crew call sheet for the first day of production.
c. Evidence that residents of this state have been paid a total of at least five thousand dollars ($5,000) for work on the pre-approved Motion Picture Production.
d. A copy of the contract or agreement directly attributable to the pre-approved Motion Picture.
Already Wrapped before receiving pre-approval? All productions require the submission of the “Initial Application for Pre-Approval”. IF the production is completed at the time the ACA issues the Pre-Approval Certification, or if the production is completed prior to the “9-Month Notification Report” deadline stated in the Pre-Approval Certification, the production company may skip the submission of the “9-Month Notification Report” and proceed directly to submitting the “Completion Report for Post-Approval” via the ACA's Electronic Application System.
POST APPROVAL
Upon completion of the Motion Picture Production, the Motion Picture Production Company MUST SUBMIT:
1) The Post-Approval Application via the ACA's Electronic Application System
2) A viewable copy (Picture Lock version requested) of the pre-approved Production, that verifies the Production Company has included in the on-screen credits an acknowledgement the Production was filmed in Arizona* and meets the content restrictions set forth in A.R.S. §41-1517(F).
3) A statement completed by a Certified Public Accountant, who is licensed in Arizona and who is approved by the Authority, to certify the total amount of eligible Production Costs associated with the Production including applicable labor costs and any other information requested by the Authority.
CPA Requirements
Productions MUST use an ACA approved Arizona-licensed CPA* who is able to meet the CPA Statement Requirements to certify the financials in your Post-Approval application. *To submit a CPA for ACA approval, please submit a CPA Approval Form via the ACA's Electronic Portal. For your reference in preparation, here's the information requested in the CPA Approval Form.
Claiming Tax Credits
Upon receipt of post-approval, the Motion Picture Production Company may claim the tax credits under A.R.S. §43-1082 or 43-1165 by filing an original tax return with the Arizona Department of Revenue (“Revenue”) accompanied by Revenue Form 334.
NOTE: A production does not need to be released or distributed to be considered complete and to generate tax credits.
Arizona Film Logo Request for Credit Usage
Please Register Your Project with our state film commission - Arizona Film & Digital Media. We can provide you with permitting, locations, and crew assistance while filming in Arizona. AFTER your production wraps, you may request use of the credit logo via our That's A Wrap Form. We'll send you a Release via Docu-Sign to use in your production credits. (Credit Logo usage is not applicable to Commercials but may be requested, if desired).
FREQUENTLY ASKED QUESTIONS
LOAN OUTS: Do you know whether loan-out registration and or tax withholding is/isn't required for Loan-out companies shooting in AZ?
Answer provided by the Arizona Department of Revenue:
Under Arizona law, the loan-out company is the "employer" [see A.R.S. § 43-402] as it controls the payment of wages. As the employer, the loan-out company must register with the department before it may remit Arizona income tax withheld. To register, the loan-out company must complete Form JT-1 and return the completed form to the department
A.R.S. § 43-401 requires the employer to withhold Arizona income tax on Arizona residents from the first day of their employment. The employee must advise the employer the percentage of his/her gross wages he/she wishes to have withheld form his/her compensation. The employee must complete Arizona Form A-4 and provide the completed copy to his/her employer. Arizona Form A-4 is available here: https://azdor.gov/forms/withholding-forms/arizona-withholding-percentage-election.
Regarding withholding of Arizona income tax on nonresidents, A.R.S. § 43-405(A)(5) requires the nonresident employee to be present and working in Arizona on the 60 th day (of the calendar year) of employment before Arizona withholding is required. Nonresident employees who are working in Arizona on the 60th day must complete Arizona Form A-4 to advise their employer the amount of Arizona income tax they wish to have withheld from their compensation. Arizona Form A-4 is available here: https://azdor.gov/forms/withholding-forms/arizona-withholding-percentage-election.
Before an employer may remit Arizona income tax withheld, it must register its Employer Identification Number with the department. To do this, the employer must complete Arizona Form JT-1 and return the completed form to the department. Form JT-1 is available here: https://azdor.gov/forms/tpt-forms/joint-tax-application-tpt-license.
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