The following is a topical summary of the rules and requirements for the Texas Moving Image Industry Incentive Program. 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.
Table of Contents
- Incentive / Program Qualifications
- Ineligible Projects
- Eligible Expenditures
- Ineligible Expenditures
- Residency Verification
- Application Process
- Start Date Confirmation
- During Production
- Verification Process
- Payment Process
- Qualifying visual effects projects are eligible to receive an incentive payment of up to 22.5% of eligible Texas spending, dependent upon project type.
- Minimum eligible Texas spending of $250,000 for film and television projects (for episodic television series, $250,000 per season).
- Minimum eligible Texas spending of $100,000 for commercial projects.
- At least 60% of production days must be completed in Texas.
- At least 70% of the total number of paid crew must be Texas residents for film and television projects.
- At least 70% of the total number of paid cast, including extras, must be Texas residents for film and television projects.
- At least 70% of the combined total number of paid crew and paid cast must be Texas residents for commercial projects.
In addition to the minimum requirements and a review of content, the Texas Film Commission will examine your Qualifying Application in light of the the potential magnitude of the economic impact of your project in the State of Texas with respect to: (i) The financial viability of the Applicant and the likelihood of successful project execution and magnitude of in-state spending; (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; and (v) Whether the project will be directed or produced by individuals who are Texas Residents (where the term “produced by” refers to a producer with direct involvement in the day to day production of the project, 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:
- obscene material, as defined by Section 43.21, Texas Penal Code;
- news, current event or public access programming; or programs that include weather or market reports;
- sporting events or activities;
- awards shows (unless broadcast on national network television to a national audience), galas or telethons; or
- commercials or advertising for the State of Texas or any State Agency or Department; 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.
- Wages and per diems paid to Texas residents for work performed in Texas, including employer paid Social Security, MEDI, OASDI, 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 process 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 feature film or television program.
- 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. As of January 23, 2014 flights purchased for production related travel on US Air or Air Tran and arriving to or departing from a Texas location are also eligible for the incentive.
- 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.
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.
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.
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, expired or illegible information will be considered invalid.
Employees with properly completed Declaration of Texas Residency Forms are the only people considered Texas residents for the purposes of calculating the 70% residency requirement.
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.
Individuals who are not Texas residents do not need to complete the Declaration of Texas Residency Form. Any payments made to these individuals cannot be applied toward the incentive.
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.
Projects interested in applying to the incentive program must contact the incentive team at 512-463-9200 to discuss fund availability.
An application package must be received by the Texas Film Commission no earlier than 120 days and no later than 5 PM Central Time 5 business days 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;
- A content document, submitted via email.
- Feature films and television programs should submit a complete script..
- Episodic television series should submit a complete script for the first episode.
- Commercial projects should submit a complete script or storyboards.
All application materials should be submitted electronically. Budget and content documents should be submitted as Adobe PDF, Microsoft Word or Microsoft Excel documents and e-mailed to filmincentive[at]gov.texas.gov.
Upon proper submission of the online application, the applicant will receive a confirmation page that acknowledges submission of the online application.
NOTE: The application package 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 120 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
Within 5 business days after the first day of principal photography or production as indicated on the application, the applicant must submit an email to filmincentive[at]gov.texas.gov confirming the start of production. If production is 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 60 days, the application may be discarded and the project may be asked to reapply.
The Texas Film Commission may periodically review production activity including, but not limited to, in-state spending, shooting locations and the number of Texas residents hired; and may request documentation for all of the above.
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 is available on the Forms and Guidelines page of the Texas Film Commission website.
The following is a general summary of documentation requirements. Documentation includes, but may not be limited to, the following:
- An accounts payable 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. 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;
- Copies of call sheets and production reports;
- Visual Effects production schedule;
- A copy of the complete crew and cast list that includes both Texas resident and non-resident cast members;
- A copy of the final content of the project; and
- Feature films and television programs must submit a DVD copy of the completed production.
- Episodic television series must submit a DVD copy of all episodes produced.
- Commercials should submit a copy of the final project.
- The CPA Audit Opinion, if required by Program Rules. Projects that have applied on or after March 27, 2017 are not required to submit a CPA audit opinion.
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 Monitoring. 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.