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Tom is a filmmaker, producer, and marketing specialist based in Los Angeles.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.
Colorado, the Centennial State, home to the majestic snow-capped Rocky Mountains, rolling high desert grasslands, and a vibrant western culture all its own. Colorado is an outdoors paradise.
Recently, with the film industry's ongoing search for cost-effective yet captivating locations for production, Colorado has also emerged as a prime production destination, thanks largely to its appealing tax incentives.
In this comprehensive guide, we’ll cover the ins and outs of Colorado film tax incentives: what they are, what production expenses they cover, and how your next production can maximize savings by applying for these generous film tax credits.
Before we dive deep into the world of Colorado film tax incentives, let's talk about Wrapbook's Production Incentive Center.
A hub for filmmakers and production companies, the Wrapbook Production Incentive Center provides detailed, state-by-state insights into film tax incentives across the US, including the lucrative options available in Colorado.
Navigating the often complex film tax incentives to determine the best location for your next production can be as confusing as it is time consuming. Until now. Wrapbook’s easy-to-use interactive database simplifies the process of identifying and applying for these incentives, ensuring your next production can maximize its budget efficiently.
To get a firsthand perspective into all that the Colorado Office of Film, Television & Media does to support in-state filmmaking, you can also check out our On Production podcast with Wrapbook Co-Founder Cameron Woodward, Colorado Film Commissioner Donald Zuckerman, and Deputy Film Commissioner Arielle Brachfeld.
Colorado offers more than just stunning landscapes ranging from the bustling mile-high city of Denver to the serene topography of the Rocky Mountains; it provides compelling financial incentives to filmmakers and production companies.
The state's commitment to fostering a thriving film industry is evident through its competitive Colorado film incentives, which are designed to lower production costs and encourage the use of local talent and resources.
Productions that have taken advantage of Colorado film incentives include feature films such as The Hateful Eight and Furious 7, as well as the television series Home Town Takeover and Top Chef.
The journey to establish Colorado film tax incentives was driven by the desire to make the state a top choice for filmmakers, matching or surpassing the allure of other popular filming destinations.
Film production has a long history in Colorado. In 1969, Colorado created the first government sanctioned film commission in the country. In 2012, the state began its Colorado film incentives program. The program has steadily grown and evolved ever since—from a rebate program in the early years to the fully refundable tax credit it is today.
Recognizing the film industry's potential to create jobs and stimulate local economies, Colorado legislated these incentives to attract more productions to its scenic landscapes and diverse locales.
Colorado film tax credits are financial incentives that allow qualifying film productions to receive a fully refundable tax credit for a significant portion of their expenditures incurred within the state.
Specifically, productions can benefit from a 20% tax rebate credit on local expenses, enhancing the state's attractiveness as a filming destination. For productions that go the extra mile in using local infrastructure or filming in rural or marginalized urban areas, an additional incentive boosts the credit to 22%.
Colorado used to have a film rebate that unfortunately was not well funded in recent years. However, starting in 2024, the new Colorado film tax credit program began mirroring the old rebate program. It’s important for filmmakers considering film incentives in Colorado to understand that the program is now a fully refundable tax credit, not a rebate.
This means that Colorado commits to reimbursing production companies for the full amount of their tax credit after they submit their taxes to the state.
The minimum spend requirements for Colorado film incentives are project dependent. Production companies that originate in the Centennial State must spend at least $100,000 in state to qualify for production tax credits.
Out-of-state production companies have a minimum spend of at least $1,000,000, except for those producing television series, commercials and video games/interactive media, all of which have a minimum spend requirement of at least $250,000.
The Colorado film tax incentives program has an annual cap of $5,000,000 per fiscal year. The state fiscal year runs from July 1 through June 30.
Finally, there is no project cap for productions receiving a Colorado film tax credit, meaning there is no set limit on the amount of money that can be awarded to any particular project.
Eligibility for Colorado film tax incentives extends to a wide range of production types, including but not limited to:
Both Colorado-based and out-of-state production companies can qualify provided they meet specific spending thresholds and hire a minimum of 50% local crew.
Qualifying expenditures for Colorado film tax credits include wages with Colorado income tax withholding, production and post-production costs, set construction, and more.
Let’s start by looking at the largest category for savings: wages.
For all cast and crew employed on productions receiving Colorado film incentives, productions receive back 20% of wages paid in the form of the refundable tax credit. This includes above-the-line residents and nonresidents and below-the-line residents and nonresidents.
There is a compensation cap of $1,000,000 per individual, meaning only the first $1,000,000 paid in wages to each individual qualifies for the 20% credit.
If cast and crew will be paid through their loan-out corporations, their loan-outs must register with the state before cast and crew begin work in the Centennial State.
Salaries and wages for residents and non-residents all qualify for the tax credit so long as income tax is withheld. Residents and non-residents must be withheld at 4.40%. Loan-outs do not need Colorado withholding starting in 2024.
Cast and crew wages make up a sizable portion of most production budgets, but you’ll need more than even the best talent in the industry to really bring your production to life.
That’s why Colorado offers a tax credit of 20% for physical production expenses. This means productions can get back 20% of every dollar spent on physical goods purchased in state from local vendors.
It's worth noting that certain expenditures, such as marketing and advertising costs, do not qualify.
The Colorado film incentives program also offers a 2% lift for using local infrastructure, rural or marginalized urban areas, raising the total possible credit to 22% for productions that qualify.
To benefit from Colorado film incentives, productions must ensure at least 50% of their crew are Colorado residents. Declaration of Colorado Residency forms must be submitted for each Colorado resident on production in order to receive the tax credit.
Additionally, there's a compensation cap of $1,000,000 per individual, and productions must show proof that they are at least 80% funded when applying for a tax credit.
It also bears repeating that all loan-out corporations paid by the production must first register with the state.
A comprehensive audit by a certified public accountant is required to verify the accuracy of reported expenditures.
And, like most film tax credit programs, Colorado requires productions that receive a film tax credit to acknowledge the program in their production’s credits.
Applying for Colorado film tax incentives is a straightforward process.
Productions must submit a Statement of Intent and Application for Conditional Approval, as well as documentation stating the projected qualified local expenditures, before beginning their activities in Colorado.
Colorado-based production companies must also provide documentation that they meet the definition of “originating" in the state by showing copies of income tax forms, proof of voter registration, or utility bills.
Colorado film tax incentives offer a golden opportunity for filmmakers and production companies to make their budgets go further while enjoying the state's diverse and beautiful.
By understanding and meeting the eligibility criteria, meticulously tracking qualifying expenditures, and following the application process, productions can significantly benefit from these incentives.
Remember, the landscape of film tax incentives can be complex, but Wrapbook's Production Incentive Center is here to guide you through every step of the way. Whether you're a seasoned producer or a newcomer to the film industry, maximizing Colorado film tax incentives can make a substantial difference in the economic footprint of your production.
And to hear more about how to maximize your filmmaking experience in Colorado, don't forget to check out our On Production podcast!
