Incentives & Tax Credits
IMPORTANT NOTICES:
- NEW – Online application portal is now available -CLICK HERE
- Filers are required to submit Pre-Production Registration Form (PRF) w/backup documentation & Hawaii Production Report (HPR) w/backup documentation via online application portal.
- Please see online portal –Manual for information -CLICK HERE
- FILERS – Please note for submitting your workforce development proof-of-donation you will need to download and print page 4 and 5 of the HPR – CLICK HERE and submit the signed document along with a copy of your donation check to [email protected]
- Please note that after submitting the HPR through the online application portal you must complete the PRODUCTION TAX CREDIT – EXPENDITURE REPORT.
- See and review PTC – Expenditure Guidance for more information.
- Please be advised that Hawai`i Film Office (HFO) may request supporting documents from the completed PRODUCTION TAX CREDIT – EXPENDITURE REPORT.
- Act 217 (effective Jan 1, 2023) Hawaii Revised Statutes §235-17 (GM1318)
- SB795 SD2 HD1 CD1
- Tax Advisory – 2022 (12-23-22) (Any taxpayer claiming the tax credit must provide this advisory to all persons involved in the production who conduct activities in Hawaii as an employee, vendor, independent contractor or loan-out company if they do not have an active General Excise Tax (GET) license.)
- Make Loan-out GET Withholding payments here – Hawaii Tax Online: Department of Taxation | State of Hawaii.
- Loan-out GET Withholding payment website instructions: Loan-out Withholding GET Payment Website Instructions
IMPORTANT UPDATE: HRS section 235-17 was amended by ACT 217- GM 1318 (effective Jan 1, 2023) these amendments supersede all previous guidance. See amendments here: ACT 217 GM1318_.PDF (hawaii.gov)
- Act 217 (effective Jan 1, 2023) Hawaii Revised Statutes §235-17 (GM1318)
- Hawaii Administrative Rules (HAR) Motion Picture, Digital Media, and Film Production Income Tax Credit
- Tax Information Release (TIR) 2021-01 (2-16-2021) RE: General Excise Tax (GET) Imposition on the Film Industry
- Act 143 (effective January 1, 2019) Hawaii Revised Statutes §235-17
- §235-17 Hawaii Revised Statutes amended by Act 143 and Act 275
Previous Tax Information Releases (superseded by newly adopted and amended Hawaii Administrative Rules):
- Tax Information Release (TIR) 2019-04 (REVISED 12-19-19)– Agreed Upon Procedures (AUP) for Mandatory Verification Review (Does not apply to filers who apply on or after Jan 1, 2023.)
- Tax Information Release (TIR) 2019–01
- Table of Contents – (TIR) 2019-01
IMPORTANT NOTICE TO ALL TAX CREDIT APPLICANTS AND CLAIMANTS:
The Hawaii Department of Taxation has issued a new Tax Advisory 2023 (12-23-22.)
Please review the above documents carefully before registering for the tax credit.
ALL TAX CREDIT APPLICANTS SHOULD CONTACT THE APPLICABLE STATE AND COUNTY FILM OFFICES FOR ANY NECESSARY PERMITS FOR FILMING IN HAWAII WITHIN STATE OR COUNTY JURISDICTIONS.
22-27% MOTION PICTURE, DIGITAL MEDIA, & FILM PRODUCTION INCOME TAX CREDIT
This is a refundable tax credit based on a production company’s qualified Hawaii expenditures while producing a qualified film, television, commercial, or digital media project. The credit equals 22% of qualified production costs incurred on Oahu, and 27% on the neighbor islands (Big Island, Kauai, Lanai, Maui, Molokai).
- Register to do business in the State of Hawai’i;
- Register with the Hawaii Film Office/Department of Business, Economic Development & Tourism at least seven days PRIOR to the Start (first day) of Principal Photography (SOPP) in Hawai’i;
- Meet the minimum in-state spending requirement of at least $100,000;
- Make reasonable efforts to hire local talent and crew Hawaii Film Office | Crew & Talent;
- Every person making a payment to a loan-out company and claiming a tax credit to deduct and withhold GET in an amount equal to the highest rate of tax plus any applicable county surcharge for all payments made to the loan-out company for services performed in the state;
- Provide evidence when making any claim for products or services acquired or rendered outside of Hawai’i that reasonable efforts were unsuccessful to secure and use comparable products or services within the state.
- Requires each taxpayer (filer) claiming the motion picture, digital media, and film production income tax credit to submit a fee in an amount equal to 0.2 % of the tax credit claimed by the qualified production; Such fee will be payable via our online portal HERE.
- Provide evidence of financial or in-kind contributions or educational or workforce development efforts toward the furtherance of the local film, television and digital media industries that is valued at 0.1% of the productions Hawai’i Spend or $1000, whichever is greater. Evidence to be uploaded to online HPR.
Note: Productions registered after Jan 1, 2023 are no longer required to secure a Verification (AUP) Review, but we do encourage it for filings with over $1M in qualified production costs.
The refundable production tax credit also includes the following:
- $50 million annual spending ceiling, but ACT 143 also provides that once the $50 million aggregate figure is reached that productions may claim from the subsequent year.
- $17 million per production credit cap (applies to productions registered in 2023 CY or after);
- Qualifies certain productions with Internet-only distribution;
- Allows State and County location and facilities fees as a qualified expenditures;
- Costs incurred for the use of state and county facilities and locations, although not subject to GET, do qualify for the incentive.
- Insurance premiums from out-of-state insurance companies, fees to obtain a verification review from out-of-state CPA firms (unless registered to do business in the State of Hawai’i) do not qualify.
- Government imposed fines, penalties, or interest incurred within Hawai’i by the production do not qualify.
- ALL banking fees, USPS postage expenditures do not qualify.
Overview & Instructions:
- Overview & Instructions 22-27% Tax Credit
- Appendix B (updated 3-14-23) follow these instructions for the Workforce Development Contribution guidance.
- Appendix C (updated 3-14-23) follow these instructions for the End Credit / Shared Card guidance.
- Also refer to:
Required Forms to be completed here :
- PRE-PRODUCTION REGISTRATION FORM (PRF) 22-27% TAX CREDIT – Due at least seven days prior to first Hawai’i shoot date.
- PRE-PRODUCTION REGISTRATION FORM (PRF) SPLIT YEAR 22-27% TAX CREDIT – Due at least seven days prior to first Hawaii shoot date.
- HAWAII PRODUCTION REPORT (HPR) 22-27% TAX CREDIT –Due no later than 90 days following the end of each calendar year in which qualified production costs were expended.
Required Attachments for the Hawai’i Production Report:
- Detailed final Hawai’i Expenditure Ledger showing all production expenditures incurred in the State of Hawaii.
- Signed Sworn Statement identifying qualified production costs incurred during the calendar year.
- Crew List with names and contact info.
- Vendor list with total costs associated with each vendor or individual and active General Excise Tax (GET) license numbers for ALL vendors. (See forms below)
- Loan Out List with total costs associated with each loan out company and active General Excise Tax (GET) license numbers for ALL loan out companies. (For productions registered on or after Jan 1,2023, you will also submit proof of GET withholding payments on behalf of loan outs.)
- Payroll log (any production employee who is not on payroll and without HI income taxes withheld, must be registered to do business in the state, and have a GET license number).
- Petty cash log (showing complete breakdown of petty cash payments and petty cash vendors).
- Verification of Education/Workforce Development Contribution (contribution must be earmarked for digital media or performing arts program in Hawaii public or charter school).
- End Credit Verification (screen grab) if available. And the Final Product and/or EPK.
- Use Tax List (if applicable) with total costs associated with each vendor and documentation that use tax was paid (via Forms G-45/49.) (See forms below).
- Signed Use Tax Sworn Statement demonstrating that reasonable efforts were made to use comparable products or services within Hawaii before items were imported into the State.
- Verification Review of your HPR and claim, for this tax credit, conducted by a Qualified CPA using agreed upon procedures prescribed by DBEDT. (This does not apply to productions registered on or after Jan 1, 2023.)
Please use the Vendor List Template below. Total costs paid to each vendor or individual must be included in required Vendor List form. Vendor List must account for all In-State vendors (tab 1) and any Out-of-State vendors (tab 2) with their active GET license numbers.
Please use the Use Tax (Imported Goods) List Template below. List must account for any qualified out-of-state vendors that provided imported goods or services (for which Use Tax must be paid.)
Please note the multiple worksheets on different tabs in each document.
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- VENDOR LIST FORM (.xlsx)
- LOAN OUT LIST FORM(.xlsx)
- USE TAX LIST FORM(.xlsx)
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ROYALTIES TAX EXEMPTION
Royalties derived from performing arts products are excluded from a Hawai’i taxpayer’s income and not subject to state income tax.
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- Overview: Royalties Tax Exemption (.pdf)
- Statute: Hawaii Revised Statutes §235-7.3
- Overview: Royalties Tax Exemption (.pdf)
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For further information, contact:
Phone: 808-492-6233 or [email protected]
Phone: 808-587-1530 or [email protected]