A BUDGET BREAKDOWN OF HOW
STATE & LOCAL FILM TAX INCENTIVES CAN ATTRACT OUT OF STATE PRODUCTIONS
Following up my last post, I wanted to use the first round budget pass we created for the upcoming Cast Members feature we plan to film in Minnesota as a demonstration using real numbers on a prospective project to show how exactly the Tax Incentives offered by Minnesota help both their local economy and me: the independent filmmaker.
Using a modest SAG low budget of around $2,000,000 as our starting point, we projected
pre-production in Minnesota lasting around two weeks with about 10 working days. We already have a local line-producer on board from the area, and plan to hire at least two other locals for pre-production; the Production Designer and a Location Scout. Between the local crew, lodging, gas and meals we would generate around $27,000 of in state spending over a 15 day
Production is generally where the bulk of any feature film budget will be spent, and tax incentives like the ones offered in Minnesota heavily encourage the use of as many local crew members as possible. I went with keeping the only local above the line crew member as the one I currently am working with, but, I will definitely be looking for other qualified Minnesota producers to join the team when we start pitching the project at the end of the summer. The tax incentive also encourages me to look at the reels of as many Minnesota based DP’s (director of photography) and production companies to partner with because of the increased percentage of the budget we are able to be reimbursed on as we add more qualified local hires.
Then, another estimated $276,000 would be spent locally between lodging for out of state cast + crew, car rentals, equipment rentals, gas, hot meals, groceries etc. This doesn’t even include the additional economic impact of what each individual out of town member of production contributes to the local economy on their off days or when not on the clock. When adding in hiring only local background actors for the film, we estimate to spend about $538,000 of the total $1.4 million we have allocated for production in Minnesota; over 25%. A number I imagine any post-COVID film economy would be drastically desiring.
Originally, I had no plans for post-production in Minnesota, but, after doing some research into local production companies and colorists located in Minnesota, I decided to at least commit to have one area of post-production be a Minnesota hire. At this point, as a production, there’s no reason not to consider the potential that we could do post-production nearly entirely in-state; but for the sake of this budget we only included a $60,000 budget for Color-Correction as our local expenses.
When totaling all of our expenses through post, we should spend right around $625,000 in state from apples boxes to hotels and a majority Minnesota local crew. We project to meet the 25% Film in Minnesota tax incentive since we are both spending at least 25% of our budget in state and a majority of our film takes place outside of a major metropolitan area (Duluth). This would net production a return of $156,000 while Minnesota would profit at least $469,000 in total revenue.
This is all money San Diego is losing out on, my home town, because of the lack of a legitimate film incentive. Or commissioner. Or even a studio (more on that in a future post). But states like Minnesota, Georgia and New York (specifically an Upstate New York tax incentive that was brought to my attention from one of the various film groups I post in) will continue to attract independent films like our upcoming The Cast Members feature because savvy indie producers know that if they save $156,000 in total expenses – they can turn that money in to plenty of other things. Added marketing, bigger post-production budget, paying for that one song that will make that one scene perfect…as a down payment to start production on your next film. As we finish up the script in July, I know I am excited and looking forward to starting the process of pre-production and working with a great state like Minnesota to get my first feature off the ground.