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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.
Aloha! Welcome to the tropical paradise of Hawaii, where the vibrant landscapes, pristine beaches, and unique culture have set the stage for countless cinematic masterpieces.
In this comprehensive guide, we'll delve into the intricacies of securing Hawaii film tax credits—a gateway to substantial financial benefits for your production. So, grab your sunscreen and let's explore the ins and outs of navigating the fruitful world of Hawaii film tax credits.
Before plunging into the intricacies of Hawaii’s film tax credit, take a moment to explore the wealth of information available at Wrapbook's Production Incentive Center. It's worth noting that Hawaii is just one among many states providing film tax incentives. Virtually every state in the U.S. boasts its unique production incentive program.
Yet, deciphering the nuances of these often intricate incentives can be both perplexing and time intensive. Enter Wrapbook—your production solution. Our user-friendly interactive database streamlines the process of researching and comparing incentives, transforming what was once a confusing task into a seamless experience.
Hawaii isn't just a location; it's a cinematic paradise. The archipelago boasts a diversity of landscapes, from the volcanic majesty of the Big Island to the lush greenery of Kauai. Steeped in centuries-old Polynesian tradition, the tropical islands are home to a vibrant and unique culture beloved the world over.
Beyond the breathtaking scenery and cultural richness, Hawaii offers robust film incentives that have positioned it as a top choice for productions.
Hawaii's love affair with the silver screen dates back decades, but it wasn't until recent years that the state strategically crafted film incentives to attract more productions. The State of Hawaii Film Office recognized the potential economic impact and job creation that filmmaking could bring.
Thus, the Hawaii film tax credit emerged as a powerful tool, enticing filmmakers to choose the Aloha State for their next project. Recent films shot in Hawaii include the Jurassic World trilogy, Godzilla vs. Kong, and Disney’s upcoming Lilo & Stitch live-action remake.
At the heart of Hawaii's film incentives is the fully refundable Hawaii film tax credit. This means that the state is committed to reimbursing production companies for the full amount of their tax credit. If your production qualifies, you can expect to receive a dollar-for-dollar reimbursement aligned with the credit percentage for which you qualify.
Hawaii film tax credits range from 22% to 27%, offering a significant financial boost for your project. The base credit is 22% for productions on Oahu and 27% for those on other islands, including Big Island, Kauai, Lanai, Maui, and Molokai—a financial embrace for filmmakers exploring the diverse landscapes beyond Honolulu and Oahu.
If you’re planning an island-hopping production that takes place in more than one county and on more than one island, HI film tax credits allow you to prorate expenditures based upon the amounts spent in each county.
The Hawaii film tax credit has a minimum spend requirement of at least $100,000. This means that productions must spend at least $100,000 in the Aloha State to qualify. Commercials may bundle production expenses of more than one commercial to meet the $100,000 minimum spend if the production of all projects is under the same company.
Hawaii also sets a project cap of $17,000,000 for its film tax credit, meaning $17 million is the most amount of money that can be awarded to any particular project.
And the Hawaii film tax credit program’s total funding cap is $50,000,000—that’s the total amount of money the Hawaii Film Office has allocated to funding film tax credits per fiscal year.
Production companies engaged in production or post-production in the state of Hawaii are eligible for the Hawaii film tax credit. This encompasses a wide array of production types, including:
Navigating the application process and meeting the criteria for HI film tax credits is crucial for eligibility, irrespective of the production type. Below, we’ll walk you through all the requirements and application process.
But first, let’s talk numbers. How much do you stand to earn back by filming in Hawaii?
To maximize your Hawaii film tax credits, it's essential to understand the qualified expenditures that contribute to the credit. These expenditures encompass both direct production and post-production spending within the state of Hawaii. They must be subject to taxation by the state to qualify for the film tax credit.
Qualified expenditures can be categorized into two main groups:
Above-the-line residents, above-the-line non-residents, below-the-line residents, and below-the-line non-residents are all eligible for the same tax credit: 22% for productions on Oahu and 27% for those on other islands.
This universal breakdown makes casting and crewing up simple, as far as the tax credit implications go. It should be noted that Hawaii expects productions to make every reasonable effort to hire local talent and crew, however. So hire local whenever possible.
Along with cast and crew wage expenses, Hawaii offers a tax credit of 22% for physical production expenses. This means productions can get back 22% of every dollar spent on physical goods purchased in state from local vendors. These include rental fees for equipment and facilities and goods purchased within the state.
Understanding and strategically utilizing these qualified expenditures will optimize your HI film tax credits.
Securing Hawaii film tax credits involves adhering to a set of requirements outlined by the state. These requirements, effective as of January 1, 2023, include:
Your production company must register to do business in the State of Hawaii by applying for and obtaining a Certificate of Authority from the Department of Commerce & Consumer Affairs.
If you’ll be paying talent and crew through their loan-out corporations, remember that out-of-state loan-outs must also register to do business in the State and obtain a Certificate of Authority.
Your production company must also register with the State of Hawaii Film Office at least seven days prior to the start of principal photography in Hawaii. Failure to register by this deadline can severely jeopardize your film tax credit and may result in the rejection of your credit.
The Hawaii State Film Office makes the process very easy. Just fill out the Pre-Production Registration Form (or Split Year Form if your production will take place over multiple years) and submit one digital copy by email and one physical copy by postal mail to the Hawaii Film Office.
As mentioned earlier, your production must meet the minimum in-state spending requirement of at least $100,000 to qualify for a Hawaii film tax credit.
It’s worth reiterating that commercials filming in Hawaii may bundle production expenses of more than one commercial to meet the $100,000 minimum spend if the production of all projects is under the same company.
Every person with business activities in Hawaii is required to apply for and obtain a General Excise Tax license and pay general excise tax on the gross income from their business activities.
The general excise tax is a tax imposed on the gross income received by the person engaging in business activity in the State of Hawaii. Your “gross income” is the total of all your business income before you deduct your business expenses.
There is a one-time $20 fee that must be paid in order to obtain a GET license.
Every person making a payment to a loan-out company and claiming a tax credit must also deduct and withhold General Excise Tax (GET) in an amount equal to the highest rate of tax—currently 4.5%—plus any applicable county surcharge for all payments made to the loan-out company for services performed in the state.
Production companies are required to get the general excise tax withholding ID number from all the loan-outs working in HI and submit them when remitting withholding tax. If you do not, you can be severely penalized to the point of having your entire Hawaii film tax credit rejected.
Payroll companies like Wrapbook can assist with remitting the general excise tax for loan-outs.
Each taxpayer claiming the motion picture, digital media, and film production income tax credit must submit a fee in an amount equal to 0.2% of the tax credit claimed by the qualified production.
Productions registered after Jan 1, 2023 are no longer required to secure an outside audit conducted by a licensed Hawaii CPA, which the Hawaii film tax credit program calls a Verification Review.
However, the State of Hawaii Film Office does encourage a CPA audit it for filings with over $1M in qualified production costs.
Productions are required to provide evidence of financial, in-kind contributions, or educational/workforce development efforts valued at 0.1% of the production's Hawaii spend or $1,000, whichever is greater.
With that in mind, it’s important to have your Hawaii production budget set before you apply for a HI film tax credit and factor this cost into your budget.
As with most film tax incentives, productions that secure HI film tax credits are required to include acknowledgment in their end screen credits that the production was filmed in Hawaii.
Screen credit may be waived in exchange for alternative marketing opportunities, approved by the Department of Business, Economic Development, and Tourism, that offer equal or greater promotional value to the state than the shared-card, end-title screen credit.
Understanding and fulfilling these requirements are crucial steps toward successfully securing your HI film tax credits.
To begin applying for a Hawaii film tax credit, producers can submit the Pre-Production Registration Form or the Split Year Pre-Production Registration Form (for productions shot over two consecutive tax years) to the Hawaii State Film Office.
These forms must be submitted online by email and as a signed hard copy mailed to the State of Hawaii Film Office seven days prior to the production’s first shoot day.
After filming begins, productions must submit the Hawaii Production Report to the Hawaii State Film Office no later than 90 days following the end of each calendar year in which qualified production costs were expended.
It is crucial you meet both these deadlines in order to secure a Hawaii film tax credit.
Required attachments to the Hawaii Production Report include:
For more information on the forms and documents needed to receive a Hawaii film tax credit, visit the State of Hawaii Film Office website.
The fully refundable tax credit, diverse landscapes, and a film-friendly environment make Hawaii an unparalleled destination for filmmakers.
For an in-depth comparison of film incentives across the United States, explore Wrapbook's state-by-state incentive breakdown. Better yet, dive into Wrapbook’s Production Incentives Center for answers to all your incentive questions. The paradise of Hawaii awaits. Aloha!
