Motion Picture Production Program (MPPP)

Motion Picture Production Program (MPPP) is sponsored by Arizona Commerce Authority. Arizona's Motion Picture Production Program is a refundable tax credit program for production companies that produce movies, television shows, commercials, or music videos in Arizona.

Arizona's Motion Picture Production Program (MPPP) is a refundable tax credit program that allows production companies the opportunity to recapture a percentage of qualified production expenses spent in Arizona to produce more than 50% of their movie, television show, commercial, or music video at a Qualified Production Facility and/or at a Practical Location beginning January 1, 2023.

**Overall, the program certification process involves (3) steps: applying for pre-approval, filing a 9th-month notification report, and applying for post-approval. ** **Links to the MPPP Rules & Guidelines and ACA Account Portal are provided below. We recommend that you REVIEW the HIGHLIGHTS section of the Motion Picture Production Program and Frequently Asked Questions (FAQs) below, _BEFORE APPLYING_.

** **_Separate from the incentive application process explained below_****, _please also_Register Your Project")**with our state film commission so that we're aware of your interest in filming here and in utilizing the film tax credit. We can then help you better understand and navigate the general incentive application process.

_**For added production value**_, you can also reduce your costs by using vendors (Blue Dots) who offer direct discounts and rebates within our**Reel Savings Program. ** **$125M - Calendar Years 2025-2043******$100M (Qualified Production Facility) $25M (Practical Location) **TAX CREDIT ALLOCATION** **BASE Credit for Qualified Production Costs** **15%** - Up to $10M (No minimum spend) **Additional Credit Uplifts** **2.

5%** of Labor Costs (Use of Arizona Resident Labor (Below-the-Line) “Production Labor” means all laborers working on a production who are not talent, writers, producers, or management. **2.

5%** of Production Costs (Qualified Production Facility Use) One of the following must occur: * Use a _Qualified Production Facility_ to produce the production in Arizona * More than 50% of the production is filmed at a Practical Location in Arizona _with all preproduction, postproduction, and editing completed at a Qualified Production Facility_ in Arizona * Produced and filmed in association with a _Long-term Tenant of a Qualified Production Facility_ in Arizona.

“Long-Term Tenant” means a person that enters into a lease of at least five years for the use of a Qualified Production Facility. apply for mPPP pre-approval (easy portal) **You'll need to create an account in the ACA Electronic Application system_before you can apply_. Please use the instructions below to assist you.

** To create a new account, click the link to “Request Username & Password” - Fill out the requested information under “REQUEST A USERNAME TO APPLY FOR INCENTIVES” - For “Industry” select _Arts, Entertainment, and Recreation_- For "Primary Program of Interest," select _The Arizona Motion Picture Production Program Once you submit this form_, the financial incentives team will create your account and send you an email from the **ACA Help Desk**with your unique username and a temporary password (please check spam or junk mail).

**Login To Submit Pre-Approval Application** Login to the ACA’s Electronic Application Systemwith this username and temporary password (both are case-sensitive). You will then be prompted to create your own "new password." _Once logged in_, you're now ready to apply - click “Incentives.

” Select _Motion Picture Production. _- Complete the _Motion Picture Production: Initial Application for Pre-Approval_. If you have any questions, please feel free to contact our Senior Program Manager, Financial Incentives, Cindy Grogan at 602-845-1221 or **CindyG@AZCommerce.

com****. ** **HIGHLIGHTS MPPP********(Provided below is a summarized version with additional guidance to serve as an _industry synopsis_ _ONLY_.) **Please read the complete Rules & Guidelines here.

**Eligible Projects**Movies, Television, Commercials, Music Videos (Visit FAQ for more information) **Fees**Application Fee: 1% of the pre-approved credit amount, not to exceed $100,000 (non-refundable) Administrative Fee:1% of the pre-approval credit amount (The administration fee is refundable if the Authority is notified within 90 days from the pre-approval certification date that production will not commence.)

**HOW TO QUALIFY (ELIGIBILITY)**To Qualify for the Base Tax Credit, production companies **must EITHER**: 1) Use a **_Qualified Production Facility_**in Arizona to produce the production _(pending construction)_ **“Qualified Production Facility”** means a structure that is built for film industry purposes, is located in this state,**_contains dedicated soundstage space that is at least ten thousand (10,000) contiguous square feet_** which may be partitionable, and meets generally accepted industry standards, including standards for soundproofing, lighting, air conditioning, and Motion Picture Production quality technology for producing, filming, or otherwise creating a Motion Picture Production.

register a qualified production facility (qpf) 2) Film more than 50% of their project at a**_Practical Location_** in Arizona **AND** perform all Preproduction, Postproduction, and Editing at an **_Industry Standard Facility_** in Arizona, **IF** such a facility for those functions is available.

**“Practical Location”** means a physical location at which a Motion Picture Production is filmed, that is not and that does not use an industry-standard sound stage or production facility to produce and film the Motion Picture Production.

**“Industry Standard Facility”** means a facility that, in the judgment of the Authority, **_has the required equipment and capabilities that meet generally minimal requirements_** followed by establishments primarily engaged in producing motion pictures, videos, television programs, or commercial advertisement messages.

These specialized capabilities may include but are not limited to mixing facilities, Automated Dialogue Replacement (ADR) rooms, screening facilities, flexible technical creative spaces designed to support picture, sound, visual effects, color or sound workflows, pre-production, and post-production support office spaces, secure data centers/technical hubs, operations support centers, and maintenance facilities, and _**is supported by appropriate power, connectivity, water, security, and related technical infrastructure.

**_ The Authority will maintain a non-exhaustive list of qualifying facilities for reference. register an industry standard facility(ISF) **Exception to Industry Standard Facility Use:**If the production believes an _Industry Standard Facility_ is unavailable within the state, it may request in writing an exception to this requirement.

An _Industry Standard Facility_ will be deemed unavailable if: (I) consideration has been paid for its use or is currently under an agreement with an option for use by another business, entity, or person and, in either circumstance, such period of use includes the applicant’s estimated start date of principal photography; or (ii) such facility does not possess capacity, due to personnel or equipment, reasonably necessary to satisfy the pre-production, post-production or editing requirements of the Motion Picture Production Company.

3) Maintain production labor force (Below-the-Line) in Arizona. 4) Meet the content restrictions set forth in **A. R.

S. §41-1517 (F)** (For more information, visit the FAQ section.) 5) Include on-screen credits (Not applicable to Commercials) to acknowledge the production was filmed in Arizona.

(To request use of the Arizona Film Commission logo in your production credits, please register your wrapped project with Arizona Film & Digital Media. We'll send you a Credit Logo Release and provide you with the Logo, accordingly.)

6) Begin production within nine (9) months of your notice of pre-approval _**and include in your Daily Call Sheet email distribution list,**the Director of Arizona Film & Digital Media, Matthew Earl Jones,**MatthewJ@AZCommerce. com**_ _**. **_ If you believe your project meets the incentive eligibility requirements, submit an**Initial Application for Pre-Approval** via the ACA Electronic Application System.

You will need to submit a project budget and affirm the project's eligibility. In the application review phase, following provision of any additional information that may be required, once eligibility is accepted, you will receive a letter of initial eligibility indicating the estimated tax credit amount and the applicable fees due. Following payment, a Pre-Approval Certification Letter will be issued.

(NOTE: This PRE-Approval Certification Letter is NOT to be confused with the POST-Approval Certification Letter, which is the actual document that a production needs to claim the tax credit in its tax filing.

* 📌PRE-PLAN - **To ensure the project can meet the **ALL Post-Production****eligibility requirement,we recommend: * **Research Post-Facilities in Advance: _Before_****submitting the Pre-Approval application,**we recommend that you research known**industry-standard Post facilities**and email them your detailed production needs regarding timeline/schedule, personnel, and technical requirements to ensure they can meet your needs.

* ****Request an Exemption Waiver:****If determined that you need to request an exemption waiver, you may submit it in writing at any time during the incentive process; _however_,please note that the waiver must be granted for the production to be eligible to receive the tax credit.

We recommend that t he waiver letter include your production information, a reference to the Rules & Guidelines section under which you're requesting the exemption, and supporting evidence. * ****New Post Vendors:**** If you identify a Post vendor in Arizona that's not currently listed with us, we recommend having them register in theSupport Services sectionof our Arizona Production Directory.

**9-MONTH NOTIFICATION PROCESS** Following receipt of your Pre-Approval Certification, a project MUST enter production _within 9 months of notice of pre-qualification status (Pre-Approval Certification issue date)_. **Step 1:**To verify that production has begun and to avoid a lapse of certification, the production company must submit the 9-Month Notification Report via the ACA's Electronic Application System.

In the 9-Month Notification filing, the production may **select _1 of the 3 options_** provided to verify that production has commenced: **1.) Notice and declaration of Commencement of Principal Photography** with an estimated start date signed by the producer, the shooting schedule (when available). **2.)

Documentation of its Arizona expenditure of the lesser of**: a. Ten percent (10%) of the estimated total Arizona budget of the pre-approved production. b.

Two hundred fifty thousand dollars ($250,000). **3. A Certificate of Insurance for the pre-approved Motion Picture Production**.

**_In addition_**, the Motion Picture Production Company must provide**one of the following** to the Authority: a. A copy of a contract, loan out agreement, or deal memo with cameraperson(s) and crew. b.

A copy of the crew call sheet for the _first**day**_ of production. c. Evidence that residents of this state have been paid a total of at least five thousand dollars ($5,000) for work on the pre-approved Motion Picture Production.

d. A copy of the contract or agreement directly attributable to the pre-approved Motion Picture. **Step 2:**To support verification of physical production, there is also**a Daily Call Sheet Submission**eligibility requirement: Please make sure to ADD the email of Director Matthew Earl Jones, MatthewJ@AZCommerce.

com, to your _**Daily Call Sheet email distribution list. **We recommend additionally including Program Manager, Ramsay Wharton, RamsayW@AZCommerce. com, to assist with this notification process.

_ **Already wrapped before receiving pre-approval? ** All productions require the submission of the “Initial Application for Pre-Approval”.

**IF** the production is completed at the time the ACA issues the Pre-Approval Certification, or if the production is completed before the “9-Month Notification Report” deadline date stated in the Pre-Approval Certification, the _production company may skip the submission of the “9-Month Notification Report”_ and proceed directly to submitting the “Completion Report for Post-Approval” via the ACA's Electronic Application System.

Please note that if you file for Pre-Approval _after you wrap_ and are granted Pre-Approval certification, hence eligible to skip the 9-Month Notification filing, please still complete the Daily Call Sheet and AZ Film Credit Logo Release steps that are required.

**POST APPROVAL PROCESS**Upon completion of the Motion Picture Production, the Motion Picture Production Company MUST SUBMIT: 1) The **POST-Approval Application** via the ACA's Electronic Application System 2) A _viewable copy **(**_**Picture Lock version requested)**of the pre-approved Production, that verifies the Production Company has included in the **on-screen credits** an acknowledgement the Production was filmed in Arizona* and **meets the content restrictions** set forth in A.

R. S. §41-1517(F).

(For more on content restrictions, visit the FAQ section.) * 📌 **Need the Film Arizona Credit Logo? ** Submit our That's A Wrap Form after wrapping.

We'll send you a Release via DocuSign to authorize our logo placement in your credits. _(Note: Credit logo usage does not apply to Commercials, but may be requested if desired).

_ 3) A statement completed by a Certified Public Accountant, who is licensed in Arizona and who is approved by the Authority, to certify the total amount of eligible Production Costs associated with the Production including applicable labor costs and any other information requested by the Authority.

* 📌 **CPA Requirements & Pre-Approval:**Productions MUST use an **ACA-approved, Arizona-licensed CPA** who can meet the incentiveCPA Statement Requirements to certify the financials in your Post-Approval application. * _To submit a CPA for ACA approval:_ Submit a CPA Approval Form via the ACA's Electronic Portal. * _For CPAs seeking to list in our Arizona Production Directory:_ Visit our CPA Approvals Process page.

cpa "Pre-approval" to LIST assurance services Upon receipt of your Post-Approval Certificate, the Motion Picture Production Company may claim the tax credits under A. R. S.

§43-1082 or §43-1165 by filing an original tax return with the Arizona Department of Revenue (“Revenue”) accompanied by Revenue Form 334. * 📌 **IMPORTANT DEADLINE NOTE:** * Post-Approval applications should be submitted by ****October 31****to ensure you can claim the tax credit within the current calendar year.

Because processing may take up to ****60 days****, filing by this deadline guarantees your Post-Approval Certificate is issued before December 31. The certificate's issuance date determines the eligible tax year. * Note: A production does not need to be released or distributed to generate or claim tax credits ### **FREQUENTLY ASKED QUESTIONS** PRODUCTION COSTS: What is eligible?

LOAN OUTS: Do you know whether loan-out registration and or tax withholding is/isn't required for Loan-out companies shooting in AZ? CLAIM CREDIT: How do I claim the film tax credit? "PRE-APPROVAL" APPLICATION REVIEW TIMEFRAME "POST-APPROVAL" APPLICATION REVIEW TIMEFRAME NAME CHANGE: for Production Company and/or Production Title CONTENT RESTRICTIONS Explained