F&E Tax Credit

Tax Credit and Point of Purchase Sales Tax Exemption

Tennessee offers a qualified production credit that can cover up to 50% of franchise tax liability. This credit is for film and entertainment producers who operate in Tennessee and meet the requirements of the state code:

Tenn. Code Ann. § 67-4-2109(j)(2). Companies approved as a qualified production can apply for a Tax Credit generated through resident and non resident payroll expenses as well as applying for a point of purchase sales tax exemption certificate on non payroll. The state validates that the costs were necessary for production. 

Applicants receive 40% of their Qualified Payroll Expenses (QPE) in tax credit, unless the expenses were paid to individuals living in a tier 2-4 enhancement county. Those individuals will receive credit equal to 50% of the expenses. Applicants can use the credit against their combined franchise and excise tax liability for QPE paid in Tennessee during the applicable tax period. To file a combined return with partner or affiliate groups for credit benefits, they will need to request approval. The credits can be extended up to 15 years. 

The Department of Economic and Community Development (ECD) and Department of Revenue (DOR) determine which Qualified Productions benefit the state, before they can apply for credit. Applicants can also apply for a point of purchase sales and use tax exemption for all of the taxable goods and services involved in the production. Third party individuals who bought or used goods or services from the production can apply separately for the sales and use tax exemption. 

Tenn. Code Ann. § 67-6-323. To apply for Qualified Production status, complete Form A for the Tennessee Entertainment Commission. If the TEC determines the applicant is involved in a Qualified Production, the ECD and DOR commissioners will determine, in print, whether the production is in the best interests of the state.

 

	Franchise & Excise Tax Credit	Sale Tax Exemption
Incentive	40% - 50%	9.25% - 9.75%
Type of Incentive	Credit generated against resident and non resident payroll expenses. Non-Transferable/Non-Refundable	Point of purchase sales tax exemption on all taxable goods, services and personal property
Refundable / Transferable / Carryforward	No/No/Yes  15 Year Carry Forward	N/A
Minimum Spend	$50k Post-Production;  $100k Non-Scripted, Video Game, Animation & Commercials;  $500k Scripted Film & TV	$50k Post-Production;  $100k Non-Scripted, Video Game, Animation & Commercials;  $500k Scripted Film & TV
Qualified Labor	1st $1M resident and non resident labor	N/A
Qualified Vendor Expenses	N/A	9.25% - 9.75% for taxable goods, services and personal property
Loan out Withholding / Registration	No / Yes	N/A
Screen Credit Required	Yes	Yes
Promotional Incentive	No	No
CPA Audit Required	No	No
Sunset Date	None	None

 

Forms & Documents

Prior to production, please review the TEC Production Incentive Guidelines, forms & applications available for download.

Download the At A Glance One Sheeter

Download the Guidelines and Instructions

Download Form A: Application for Approval as Qualified Production

Download Form B: Tennessee Declaration of Residency

(Form B is only for each Tennessee Resident with primary residency in Tier 2, 3 & 4 enhancement counties, in which the qualified production is claiming a credit for qualified payroll expenses.)

Download Form C: Final Application for Qualified Production

Download Form D: Qualified Positions

Download The Application for Registration

Download the Application for Qualified Production SU Exemption

Download the Application for Qualified Production FE Tax Credit

Download the Power of Attorney Form

List of Qualified Payroll Expenses for the Qualified Production Credit

(Will need to be submitted along with Form C Part 3 documents)

List of Qualified Production SU Expenses

(Will need to be submitted along with Form C Part 3 documents)

Download Appendix A: List of Qualified Expenses 

Download Appendix B: Map of County Tiers

Download Appendix C: Example Organizational

Please submit all required forms and applications, including all form and application attachments, electronically to tn.entertainment@tn.gov. To learn more, call (615) 741.3456.