Responding to the film community’s demand for more in-state production, Governor John Hickenlooper and Colorado lawmakers created House Bill 12-1286 in July 2012. The new legislation improved Colorado’s existing film incentive law, increasing the performance based rebate from 10% to 20%, and created a new and unique loan guarantee program. The Colorado Film Office can also offer additional benefits to bonded feature films.
How do I apply for the incentive?
Applications must be approved by the Colorado Office of Film, Television & Media (COFTM) before beginning principal photography. Applications submitted after the end of production cannot be considered. Due to the nature of our approval process, it is best to contact the office before completing the application at 303-892-3840 or complete the pre-application here.
When should I apply for the incentive to be considered eligible?
All applications must be submitted before principal photography and require initial approval from the COFTM. Additional approval must be granted from the Economic Development Commission, which meets once a month. Applications must be received at least 2 weeks before the scheduled meeting time. A schedule of meetings can be found here.
What determines if a project “qualifies” for the incentive?
COFTM reserves the right to approve or deny applications, which are not accepted on a first-come, first-serve basis. In addition to prior approval, you must be certain requirements in order to be eligible, such as:
- Have a minimum spend on qualified local expenditures of at least $100,000 for Colorado companies and residents.
- Have a minimum spend on qualified local expenditures of at least $1,000,000 for out-of-state companies and residents (the exception being television commercials and video game productions, which must have qualified local expenditures of $250,000).
- A crew base of at least 50% Colorado residents.
- Colorado income tax must be withheld for Colorado residents.
- The production must be at least 80% funded or be prepared to show proof of financing.
- After completion, the production company must retain a Certified Public Accountant (CPA) to review eligible expenses (see Expectations for CPA Audit document for further details).
- A full list of requirements can be found in our legal section
What if I am a Colorado resident, but my budget is under $100,000. Are there any funds available?
We cannot incentive or grant funds to any production under the minimum spend of $100,000.
What type of media projects qualify for the Incentive?
“Film” means any visual or audiovisual work, including, without limitation, short films, documentary films, web content, video games, television series or episodes, commercials, or other media content that contains a series of related images, regardless of the medium by which the work is fixed and from which it can be viewed or reproduced, and that is primarily intended to be either commercially exploited by being shown in theaters or on television licensed for the home or international market, or otherwise; or for internal industrial, corporate, or institutional use. Film does not include an obscene film (obscene is defined in section 18-7-101 (2), C.R.S.)
How do I qualify for the Loan Program?
The Loan Program is only available to feature film productions. COFTM reserves the right to approve or deny loan applications based on some of the following criteria:
- The experience, professional qualifications, and business background of the production company
- The production company shall be bonded by a major bonding company; and
- The production company shall have contracted with a major sales company with experience and standing in the film industry, and such sales company shall provide sales estimates that support full repayment of the loan to be guaranteed.
What is a “qualified expenditure?”
A full list of program definitions can be found here.
How to I determine whether individuals are employees or independent contractors?
The film office complies with IRS regulations for employees. In determining whether the person providing service is an employee or an independent contractor, facts that provide evidence of the degree of control and independence fall into three categories:
-Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
-Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
-Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Visit www.irs.gov for a complete list of guidelines.
How long does it take to find out if I get the incentive?
Applications are presented at monthly Economic Development Commission meetings. Applicants will be notified of approval or denial immediately after the committee resigns.
Where does funding come from and how much do you have available?
Our incentive funding comes from the State of Colorado’s General Fund and must be requested on a yearly basis. The amount of funding available depends on the allocation from the Colorado Legislature and amount of incentives encumbered to previous applicants.
When does COFTM’s fiscal year begin (when are the funds replenished)?
Our fiscal year runs July 1 – June 30.
What happens if I fail my audit?
Your incentive application receives conditional approval prior to filming. All qualifications within the program terms and contract must be fulfilled in order to receive the rebate. If an audit does not prove requirements are met, you will no longer be eligible and the funds will be released back to the office.
What is the difference between in-state and out-of-state applicants?
An in state company means a company that has been registered with the Secretary of State for at least twelve consecutive months; except that, if a Colorado resident creates a business entity for the sole purpose of conducting production activities in the State, then such a business entity need not be registered with the Secretary of State for twelve consecutive months, but the owner of the business entity must be a resident of the State for at least twelve consecutive months.
Can I claim non-resident labor as a qualified expenditure?
All labor can be claimed as a qualified expenditure as long as all Colorado income tax is withheld. Though non-resident labor can be claimed as a qualified expenditure, it does not satisfy the 50% crew requirement – a Colorado crew resident is defined as an individual that has been a Colorado resident for at least 90 days.
Is Above the Line labor a qualified expenditure?
Yes, we incentive ABL and BTL.
I am interested in moving my production business to Colorado. Does that qualify for the incentive?
Our incentive only covers content creation. At this time we cannot incentivize or grant money to companies for any other reason that creative production on a project-by-project basis.