Reduce your current (and past) Georgia tax liability with these lucrative credits.
I’ve previously mentioned several tax credit programs available to help reduce your tax liability, including Georgia land conservation programs, rural hospital tax credits, and film tax credits. Today I want to focus on Georgia film tax credits, as they are still available for multiple years and offer an excellent return on a low-risk investment. CPA’s aren’t necessarily known for their enthusiasm, but the BJM team is excited about this short-term opportunity for individuals and corporations.
Below is an explanation of Georgia film tax credits, how the process works, and why a quick return on investment is worth your consideration. We’re reviewing client records right now to determine who may be eligible for this Georgia tax savings opportunity, but please contact us immediately if you’d like to learn more. Even if you’re not a client, we would be happy to meet with you!
What are Georgia film tax credits?
Just drive around downtown on most weekends, and you’ll see lighting trucks setting up for some movie scene. Georgia is now one of the top TV and movie producing states in the country, thanks largely to the Georgia Film, Television, and Digital Entertainment Tax Credit. Eligible companies can earn up to a 30% tax credit for doing film production work in Georgia.
Since many production companies don’t have enough tax liability to utilize the full tax credit, they are allowed to sell the leftover credit – typically working through 3rd party brokers. The final tax credit sale to folks like you and me is usually at about a 10% discount, so you would buy each $1.00 of Georgia tax credit for about $0.90. Please note that discounts fluctuate.
Here’s a Georgia film tax credit example
In order to qualify, individuals or corporations need to have:
- Georgia tax liability
- Money to buy the credits
Let’s say that you paid at least $100,000 in Georgia taxes over the past 3 years – 2016-2018. Working with the BJM team, you decide to purchase $100,000 of Georgia tax credits over 3 years. You’ll pay about $90,000 to get $100,000 of credits, for a $10,000 savings.
You’ll have to pay capital gains tax on that savings – unless you have capital loss carryovers to offset the income – plus some CPA fees to file amended Georgia tax returns, so your net savings would be about $6,000. That’s $6,000 extra in your pocket for making a phone call. Not a bad return on investment! The process takes about 3 months, so you’ll need to be able to “float” the tax credit purchase until you receive your refund.
Contact BJM to see if you qualify
Each individual and corporate situation is unique, so it’s best to discuss your options with a CPA who has Georgia film tax credit experience, like the BJM team. As I mentioned above, we’re reviewing the Georgia tax liability of all clients. If you would like to meet immediately, or aren’t currently a BJM client, please contact us today and we’ll set up a meeting.
Neal Bach, CPA