Frequently Asked Questions (FAQs)
Q: What is the Oklahoma Indion Entertainment Group incentive?
A. The Oklahoma Indion Entertainment Group incentive became available to IEG in 2006 to encourage film and video production in Oklahoma. The program allows Oklahoma income tax credits of 30% of a production's budget. Typically, the out-of-state production companies earning a portion of the tax credits do not have sufficient Oklahoma tax liability to use the tax credits. IEG facilitates in state investors seeking the tax credits as a return on their investment allowing the production company the benefit of a decrease in their at-risk investment.
Q: Can the tax credits be recaptured (taken back) by Oklahoma?
A: Under certain circumstances, the tax credits can be recaptured by Oklahoma. IEG's structure attempts to protect against recapture through use of the following:
- Private Letter Ruling. IEG has secured a private letter ruling from the Oklahoma Tax Commission that addresses the generation of the tax credits, the allocation of the tax credits, and the application of the tax credits.
- Security Interest in Property. IEG and the company producing the motion picture enter into an agreement, pursuant to which the parties agree on IEG's right to a security interest in the project, until such time as the compliance requirements by the company have been met and IEG is confident the tax credits will not be subject to recapture.
- Compliance Oversight: IEG will maintain compliance oversight of each company to ensure that all requirements under the applicable statute are met and that credits will not be subject to recapture.
Q: What if the motion picture is a failure?
A: The tax credits are not affected by the motion picture's success or failure. The taxpayer receives the tax credits as a return on the investment in the motion picture, and is not exposed to any risk if the motion picture ultimately fails in the marketplace.
Q: When do I have to make the investment?
A: Under IEG’s structure, taxpayers are not required to make the investment until the production company is willing and able to make their investment. It is anticipated that taxpayers will require a period of time for due diligence, and as such, IEG expects that the co-investments (both parties) will be made approximately 30 to 60 days after the date the investment opportunity is presented.
Q: How much will I save on my state taxes?
A: The tax credit available through IEG equals 30% of a taxpayers Oklahoma state tax liability.
Q: Where can I find more information about IEG?
A: Interested parties should feel free to contact the Oklahoma Film Commission as a reference for our services. The Oklahoma Film Commissioner, can be reached at:
(405) 230-8440 In-State
(800) 766-3456 Toll-free
(405) 230-8640 Fax
http://www.oklahomafilm.org
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