North Carolina Tax Credit for Qualifying Expenses of a Film or Television Production Company

Tax Credit for Qualifying Expenses of a Film or Television Production Company
Form NC-415
Tax Credit for Qualifying Expenses of a
Film or Television Production Company

NC-415
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North Carolina Department of Revenue

Return for Year Ended

(MM-DD-YY)

FEIN or SSN (No dashes)

Name (Individual’s name or entity’s legal name)

Address

City

State

Contact Person

Phone Number for Contact Person

Fill in the circle that corresponds
to the tax form you filed:

Zip Code

Individual (D-400)

C-Corp (CD-405)

Estate or Trust (D-407)

S-Corp (CD-401S)

Date Production Activities Completed
(MM-DD-YY)

Partnership (D-403)

Part 1. Production Information
Number of people employed in North Carolina with respect to the production
Enter the name and a description of production

List all North Carolina counties used as sites in the production

Part 2. Computation of Credit for Qualifying Expenses of a Production Company

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1. Total qualifying expenses spent in North Carolina for goods leased or purchased
2. Total qualifying expenses spent in North Carolina for services leased or purchased
3. Total qualifying expenses spent in North Carolina for compensation and wages paid
(Do not include amounts in excess of $1,000,000 paid to a highly compensated individual.)

4. a. Employee fringe contributions
b. Other qualifying expenses
5. Total North Carolina Qualifying Expenses
Add Lines 1 through 4b (If $250,000 or less, stop here; you are not eligible for the credit.)
6. Credit for Qualifying Expenses of a Production Company

Multiply Line 5 by 25% (.25) and enter amount here; do not exceed $20,000,000 for a production that
is a feature film.

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Part 3. Certification
I certify that the taxpayer filing Form NC-415 meets the requirements for claiming the tax credit and that the information given is, to the best of my
knowledge, accurate and complete.

Signature of Taxpayer or Authorized Agent

Date

MAIL TO: North Carolina Department of Revenue, Central Exams, Corporate Group Manager,
PO Box 871, Raleigh, North Carolina 27602

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NC-415
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General Information

This form is used to calculate the amount of income tax credit for qualifying expenses of a production company and should only be used
for taxable years beginning on or after January 1, 2011. The credit is calculated on all of the taxpayer’s qualifying expenses incurred in
this State in connection with a production, including expenses incurred in earlier years. The tax credit must be claimed in the taxable
year in which the production activities are completed. If more than one production is completed during a taxable year, a separate Form
NC-415 must be filed for each production. The information below does not cover all provisions of the law. For more information, go to the
Department’s website, www.dornc.com, and select “Tax Professionals”.
Eligibility. A production company that has qualifying expenses of
at least two hundred fifty thousand dollars ($250,000) with respect
to a production is allowed a credit against income taxes equal to
twenty-five percent (25%) of the production company’s qualifying
expenses.

	

Qualifying expenses for goods. Spending for goods
purchased or leased from North Carolina businesses
is eligible for the tax credit. This includes fuel, food,
airline tickets and other goods if purchased or leased
from a business located in North Carolina.

Due date. To be eligible for the tax credit, the production company
must file Form NC-415 with the Department of Revenue by the due
date of the income tax return for the taxable year in which the
production activities are completed. If the taxpayer is granted
an extension of time to file its income tax return, the due date for
Form NC-415 will be extended to correspond with the extended
due date of the income tax return. Processing of the credit cannot
begin until after the income tax return for the taxable year in which
the production activities are completed is filed.

	

Qualifying expenses for services. Spending for
services is eligible for the tax credit, regardless of
whether paid to residents or nonresidents, if the
services are performed in North Carolina. The amount
paid to an individual through a personal services
corporation or an employee leasing organization
is subject to the “highly compensated individual”
limitations in calculating the allowable credit.

Taxpayers must claim the income tax credit for qualifying expenses
on Form NC-415. Any tax liability for the tax year in which the tax
credit is claimed must be paid to the Department of Revenue before
the tax credit can be processed. Important. A pass-through entity
that qualifies for this credit does not allocate the credit among its
owners as is the general rule for credits earned by pass-through
entities. Instead, the pass-through entity is considered the taxpayer
for purposes of claiming the credit.
	
Limitations. The amount of tax credit allowed for a production that
is a feature film may not exceed twenty million dollars ($20,000,000).
There is no maximum credit for other types of productions. No credit
is allowed for the following types of productions:
	

Political advertisements.

	

Television productions of a news program or live 			
sporting event.

	

Productions that contain material that is obscene, as 		
defined in G.S. 14-190.1.

	

Radio productions.

Substantiation. Taxpayers claiming this credit must maintain and
make available for inspection any information or records required
by the Department of Revenue. The burden of proving eligibility
for the credit and the amount of credit rest upon the taxpayer.
The Department of Revenue may consult with the North Carolina
Film Office of the Department of Commerce and the regional film
commissions to determine the amount of qualifying expenses.
Qualifying expenses subject to audit before credit is allowed.
Definitions. The following definitions apply:
Qualifying expenses - The sum of the following amounts spent in
this State by a production company in connection with a production,
less the amount in excess of one million dollars ($1,000,000) paid
to a highly compensated individual:
1.	 Goods and services leased or purchased. For goods
with a purchase price of twenty-five thousand dollars
($25,000) or more, the amount included in qualifying
expenses is the purchase price less the fair market value
of the good at the time the production is completed.

2.	 Compensation and wages on which withholding
payments are remitted to the Department of Revenue.
Compensation and wages paid to employees for services
performed in North Carolina on which withholding
payments are remitted are eligible for the tax credit
regardless of whether paid to residents or nonresidents.
The amount paid to an individual through a personal
services corporation or an employee leasing organization
is subject to the “highly compensated individual” limitations
in calculating the allowable credit.
3.	 The cost of production-related insurance coverage
obtained on the production. Expenses for insurance
coverage purchased from a related member are not
qualifying expenses.
4.	 Employee fringe contributions.
5.	 Other expenses. Per diems, stipends, and living
allowances paid for work being performed in the State.
Highly compensated individual - An individual who directly
or indirectly receives compensation in excess of one million
dollars ($1,000,000) for personal services with respect to a single
production. An individual receives compensation indirectly when
a production company pays a personal service company or an
employee leasing company that pays the individual.
Production company - A person engaged in the business of making
original motion picture, television, or radio images for theatrical,
commercial, advertising, or educational purposes.
Feature film - A movie made for initial distribution in theaters that
is over 40 minutes long.
Live sporting event - A scheduled sporting competition, game,
or race that is originated solely by an amateur, collegiate, or
professional organization, institution, or association for live or tapedelayed television or satellite broadcast. A live sporting event does
not include commercial advertising, an episodic television series, a
television pilot, a music video, a motion picture, or a documentary
production in which sporting events are presented through archived
historical footage or similar footage taken at least 30 days before
it is used.
Related member - See G.S. 105-130.7A.