The Georgia Department of Revenue (GDOR) made significant changes to the film tax credit audit process, effectively addressing the majority of concerns raised by film industry stakeholders and CPAs.
Says Kelsey Moore, Georgia Screen Entertainment Coalition, Executive Director, “The Georgia Department of Revenue’s (GDOR) changes are a significant step in maintaining Georgia’s competitive edge and strengthening our reputation as a top choice for film production. GDOR listened to industry concerns and made appropriate changes to streamline the film tax audit process — all while upholding the intent and rigor of the audit process. These changes will improve clarity and parity in the audit process, decrease unnecessary audit expenses, and increase the timeliness of certification and monetization of credits. GSEC appreciates GDOR’s commitment to Georgia’s standing as a premier film production hub.”
Key changes to Georgia film tax credit audit process includes:
- Sample sizes now scale with AP/PC expenses and are significantly reduced overall, reducing the amount of time and expense involved in sampling.
- Sampling errors are now projected in a more fair way based on the “point estimate” of the population after statistical evaluation (rather than the lower confidence limit in the population used previously).
- This means that small errors in samples will have a less material error projection and this projection method is more consistent with other film tax credit jurisdictions.
- Fixed asset reporting/depreciation is now only required for assets over $10,000.
- Airfare and lodging expenses no longer have to be broken out separately. At the election of the production company, airfare can either be tested separately or included in AP expenses and sampled as part of AP.
- Payroll reports to GL reconciliations can be made on a consolidated basis.
- Productions can avoid reporting and providing comparable receipts for related party transactions if the production obtains a transfer pricing study.
Starting with audits initiated on or after Jan. 1, 2025, the changes create a more efficient, predictable, and cost-effective process for productions to monetize their credits. The streamlined process will enhance clarity and fairness, reduce unnecessary audit expenses, and ensure credits are certified in a timely manner.
“These are the types of changes that solidify Georgia’s reputation as a global leader in film and television production. We are seeing immediate impact: Two feature films we are working with were exploring options in other states — and, once learning that Georgia’s audit process has been improved, confirmed their decision to film in Georgia,” said Chelsea Spivey, Revolution Entertainment Services, Senior Director, New Business Development & Production Incentives.
These changes are a significant step in enhancing Georgia’s competitiveness as a premier film production hub. It highlights the collaborative efforts of state agencies and industry leaders, reaffirming Georgia’s reputation as a business-friendly state committed to the film sector’s success.
Independent production companies, accounting firms and the larger studios have praised the changes. Says Brandon Reese of the Motion Picture Association, “The Motion Picture Association applauds Georgia’s strong commitment to supporting film and television production. By identifying key areas for improvement and taking decisive action, state leaders have strengthened Georgia’s appeal as a premier production hub—driving business investment, job creation, and long-term economic growth.”
More information at Georgia Screen Entertainment Coalition’s web site.
