As if the spectacular locations, welcoming climate, and relative proximity to the U.S. mainland weren't enticing enough, the State of Hawaii offers two different tax incentives to all U.S. production companies and producers that may be applied to film and television productions:

15-20% Motion Picture, Digital Media, & Film Production Income Tax Credit. This is a refundable tax credit based on a production company's Hawaii expenditures while producing a qualified film, television, commercial, or digital media project. The credit equals 15% of qualified production costs incurred on Oahu, and 20% on the neighbor islands (Big Island, Kauai, Lanai, Maui, Molokai). This tax credit is new and a great incentive. It was established in 2006 and is commonly referred to as "Act 88." 100% High Technology Business Investment Tax Credit. This credit was established by Act 221 in 2001 and amended by Act 215 in 2004, and is therefore commonly referred to as "Act 221" or "Act 215." It is a non-refundable income tax credit applicable to Hawaii taxpayers that invest in qualified companies producing "performing arts products," including film, television, video, audio, and animation products. The credit is equal to 100% of the investment amount, payable over five years.

The Hollywood Reporter, recently published an article titled "The Aloha Allure" explaining the impressive benefits of producing Films and Television Projects in Hawaii.


Are you wondering which benefit is best for you and your production? If so, please contact attorney Robert Pafundi, the owner of MGA Talent, for more information. In the meantime, the Hawaii Film Office offers guidelines on which tax advantage is best for you:

	15-20% Motion Picture, Film, and Digital Media Income Tax Credit under Hawaii's Act 88	100% High Technology Business Investment Tax Credit under Hawaii's Act 221
For whom is this credit best suited?	Visiting “one-off” productions or any individual production over $200K that already has all the funding it needs to begin production	"Performing arts" companies seeking to raise investment from Hawaii taxpayers and planning to remain in business in Hawaii for at least 5 years
Amount of credit	15% of “qualified production costs” expended on Oahu, 20% of “qualified production costs” expended on the neighbor islands	100% of investment amount
Type of credit	Refundable income tax credit	Non-refundable income tax credit
Who gets the credit?	Production company that produces film, TV, commercial, or digital media project	Investor in a qualified "performing arts" business that produces audio, video, animation, TV, and film products
Need Hawaii income tax liability to benefit from the credit?	No	Yes
Refund timeframe	After you file a Hawaii Production Report with the Hawaii Film Office and an income tax return and credit forms with the Tax Dept., it will take 6-8 weeks to receive your check	5 years or, as long as it takes to exhaust the credits if the investor does not have enough tax liability to absorb them within 5 years. Company receiving investment must be in business in Hawaii for at least 5 years or investors will be subject to a credit recapture.
Minimum Hawaii expenditure	$200,000	None, but a company must pass an activity test (50%+ of its business activities are "qualified research," and 75%+ of this research is conducted in Hawaii) or an income test (75%+ of its gross income is from “qualified research” and is received from products sold from or produced in Hawaii; or from services performed in Hawaii.)
Cap	$8 million per production	$2 million per investor per investment in qualified business per year
Credit program expiration date	December 31, 2015	December 31, 2010