Moving Image Industry Incentive Program - Commercial Projects
The following is a topical summary of the rules and requirements for the Texas Moving Image Industry Incentive Program. Please click here to read the complete rules and requirements as promulgated in the Texas Administrative Code, which govern in the event of a conflict or ambiguity with the summary below. If you have any questions concerning the rules, please contact us. The Office of the Governor, Texas Film Commission, as a state agency, must comply with the Texas Public Information Act (the "Act"). In the event that a public information request related to the applicant is submitted to the agency, the agency will (i) promptly notify the applicant of the request, (ii) take all appropriate actions with the Attorney General of Texas to prevent release of confidential information, including asserting exemptions under the Act, and (iii) provide the applicant with full information and opportunity to participate in such process.
Qualifying projects are eligible to receive an incentive payment equal to 5% of eligible Texas spending.
- Minimum eligible Texas spending of $100,000.
- At least 60% of shooting days must be completed in Texas.
- At least 70% of the total number of paid crew, cast and extras combined must be Texas residents.
NOTE: A series of commercials is defined as more than one commercial created in a contiguous production period and promoting the same product, service, or idea. Commercials produced in a non-contiguous production period or promoting different products, services or ideas cannot be combined for the purposes of meeting the minimum Texas spending requirement.
In addition to an examination of the foregoing minimum requirements and a review of content, the Texas Film Commission will examine your Qualifying Application in light of the following criteria to assess, in the aggregate, the potential magnitude of the economic impact of your project in the State of Texas: (i) The financial viability of the Applicant and the likelihood of successful project execution and planned spending in the State of Texas; (ii) Proposed spending on existing state production infrastructure (such as soundstages and industry vendors); (iii) The number of Texas jobs estimated to be created by the project; (iv) The ability to promote Texas as a tourist destination through the conduct of the project and planned expenditure of funds; (v) The magnitude of estimated expenditures in Texas; and (vi) Whether the project will be directed or produced by an individual who is a Texas Resident (where the term "produced by" is intended to encompass a non-honorary producer with direct involvement in the day to day production of the project, but above the level of line producer).
If your project does not meet these qualifications, it is not eligible to receive funds from the Moving Image Industry Incentive Program, but it may be eligible for Texas' Sales Tax Exemptions.
The following types of projects, among the various other types of prohibited projects described in the Program Rules, are not eligible to receive funds from this program.
- Commercials or advertising for the State of Texas or any State Agency or Department;
- obscene material, as defined by Section 43.21, Texas Penal Code; or
- projects intended for undergraduate or graduate course credit.
The State of Texas is also not required to make payments to projects that include inappropriate content or content that portrays Texas or Texans in a negative fashion.
UNDERUTILIZED OR ECONOMICALLY DISTRESSED AREAS
Projects that complete at least 25% of their total shooting days in an underutilized or economically distressed area of Texas may receive an additional 2.5% of in-state spending, for a total incentive payment equal to 7.5% of eligible Texas spending.
An underutilized or economically distressed area of Texas is defined as:
- an area that receives less than 15% of total film and television production in the state during a fiscal year; or
- an area that has a median household income that does not exceed 75% of the median state household income.
- Wages and per diems paid to Texas residents for work performed in Texas, including employer paid FICA, FUI, SUI, PH&W and Vac & Hol payments. Total compensation (including wages, per diems and eligible fringes) is capped at $1 million per worker, per project.
- Workers compensation insurance payments may be included only if the premiums are paid to a Texas-based company.
- Payroll company service fees may be included only if paid to a Texas-based payroll company that processes payroll within Texas.
- Payments made to Texas companies for goods and services domiciled and used in Texas that are directly attributable to the physical production of the commercial project.
- Payments for shipping on shipments originating in Texas.
- Air travel to and from Texas on a Texas-based airline, including American Airlines and Southwest Airlines, or on a Texas-based air charter service.
- Rentals and leases of vehicles registered and licensed in the State of Texas.
- Music that is specifically created for the project and fees paid to Texas residents hired to create, orchestrate and perform the music.
- Legal fees that are directly attributable to the production and are paid to a Texas-based lawyer or law firm.
- Wages and fringes paid to non-Texas residents.
- Per diems paid to non-Texas residents.
- Payments to non-Texas vendors, or for goods and services not directly attributable to the physical production of the feature film or television program including, but not limited to, entertainment expenses, gifts and party expenses.
- Fees for story rights, music rights or clearance rights.
- Expenses related to distribution, publicity, marketing or promotion of the project.
- Rental, lease or mortgage payments, to include utilities and insurance, on facilities that are part of a permanent/continuous business operation.
- Payments made to pass-through companies.
- Payments for shipping on shipments that originate outside of Texas.
- Alcohol and tobacco purchases.
- Tips and gratuities.
All crew members, cast members or permanent employees who receive any payment for working in Texas must be included in the total crew and cast counts and listed on the crew and cast lists of a project. Proof of residency for all Texas residents working on a project must be properly documented in order to meet the 70% residency requirement for crew and cast, and to apply payments made to Texas residents toward the incentive.
As proof of residency, each Texas resident crew member, cast member (including extras and stand-ins) or permanent employee must complete a Declaration of Texas Residency Form.
To be considered a Texas resident for the purposes of the incentive, a person must be permanently domiciled in Texas for at least 120 days prior to the first day of principal photography and be able to complete sections I, II and III of the Declaration of Texas Residency Form. Section III must be completed with one of the following documents:
- A current Texas driver license or ID card.
- A current Texas voter registration.
- A current student ID card from a Texas Institution of Higher Education (full-time college students only).
Please note that in addition to the document information, Section III also requires the employee to initial where indicated in Section III, paragraph 2 and provide a signature in the signature box.
A minor who does not have the necessary document to complete Section III of the form should have a Texas resident parent or legal guardian complete section III and note their relationship to the minor in the signature box.
Section IV of the Declaration of Texas Residency Form must be completed by an authorized representative of the production company or incentive applicant who has reviewed and authenticated (to the best of their ability) the document presented by the employee to complete section III of the form. It is not necessary to obtain a physical copy of the employee's document.
To be considered valid, Declaration of Texas Residency Forms must be filled out completely, correctly and legibly. Any residency form with missing or illegible information or that is completed with an expired or invalid document will be considered invalid. To avoid potential problems with residency documentation, the residency form should be completed at the start of an individual's employment on a project.
Individuals with properly completed Declaration of Texas Residency Forms are the only people considered Texas residents for the purposes of calculating the 70% residency requirement. Eligible payments made to these individuals can be applied toward the incentive. These individuals should be included in the crew and cast count and listed on the crew and cast lists as Texas residents.
Individuals without properly completed Declaration of Texas Residency Forms cannot be considered Texas residents for the purposes of calculating the 70% residency requirement, and any payments made to these individuals cannot be applied toward the incentive. These individuals should be included in the crew and cast count and listed on the crew and cast lists as non-Texas residents.
Individuals who are not Texas residents do not need to complete the Declaration of Texas Residency Form. They are not considered Texas residents for the purposes of calculating the 70% residency requirement, and any payments made to these individuals cannot be applied toward the incentive. These individuals should be included in the crew and cast count and listed on the crew and cast lists as non-Texas residents.
Individuals who do not perform any work in Texas do not need to complete the Declaration of Texas Residency Form. Payments made to these individuals cannot be applied toward the incentive, and these individuals should not be included in the crew and cast count or listed on the crew and cast lists.
The following must be received by the Texas Film Commission no earlier than 30 days and no later than 5 PM Central Time on the business day prior to the first day of principal photography:
- A Qualifying Application, to be completed and submitted online;
- An itemized budget detailing only estimated Texas expenditures, submitted via email; and
- A content document, submitted via email. Commercial projects should submit one of the following documents:
- Complete script(s).
- Complete storyboards.
All application materials should be submitted electronically. Budget and content documents should be submitted as Adobe PDF, Microsoft Word or Microsoft Excel documents.
Upon proper submission of the online application, the applicant will be forwarded to a confirmation page that acknowledges submission of the online application and provides the email address to which the budget and content document should be submitted.
NOTE: The application is not complete until all required documents have been received.
Please do not submit an application if:
- Your project does not meet the Program Qualifications.
- Your type of project appears on the Ineligible Projects list.
- You do not have the necessary budget or content documents to complete the application package.
- It is more than 30 days from your project's first day of principal photography.
- The first day of principal photography on your project has already occurred (see below).
Late applications will not be accepted. If you have already started principal photography, you cannot apply to the Texas Moving Image Industry Incentive Program.
START DATE CONFIRMATION
If principal photography is delayed, a new start date should be provided along with the reason for the change. If the start of principal photography is delayed for more than 30 days, the application may be discarded and the project may be asked to reapply.
Within 60 days of completing Texas expenditures, final verifying documentation should be submitted to the Texas Film Commission in either hard copy or digital format. Specific guidelines have been established for submitting the final verifying documentation, and this information will be provided upon approval of your incentive application.
The following is a general summary of documentation requirements. Documentation includes, but may not be limited to, the following:
- An expended budget, master ledger or budget actual that reflects all project spending;
- An expended budget, master ledger or budget actual that reflects only eligible Texas spending;
- An accounts payable or purchase order spreadsheet, sorted by vendor, that reflects only eligible in-state transactions and includes copies of all checks, invoices and receipts for each vendor;
- A petty cash spreadsheet, sorted alphabetically by name, that reflects only eligible in-state transactions and includes copies of the petty cash envelope fronts and all receipts;
- A payroll spreadsheet, sorted alphabetically by name, that reflects only payments made to Texas residents and includes copies of the payroll company invoices and the payroll company registers that detail wages and fringes paid to Texas residents;
- A copy of each Texas resident's Declaration of Texas Residency form;
- Location maps and copies of call sheets and production reports;
- A copy of the complete crew list that includes both Texas resident and non-resident crew members or, if a crew list is not available, a list of non-Texas resident crew members;
- A copy of the complete cast list that includes both Texas resident and non-resident cast members or, if a cast list is not available, a list of non-Texas resident cast members; and
- A copy of the final project.
Following a review by the Texas Film Commission, the final documentation will be submitted for a compliance review by the Governor's Office Division of Compliance and Oversight. Disbursement of funds will not occur until the production has paid all financial obligations incurred to the State of Texas, and the final compliance review has been completed and approved.