1) BEFORE beginning ANY work on the film production activity in the State, an
Application for Qualification or a Maryland Small Film - Application for Qualification MUST be submitted to the Department along with ALL required attachments.
2) NO LATER THAN 180 days after the completion of all film production activity in the State (the "completion date"), an
Application for Final Tax Credit Certification or a Maryland Small Film - Application for Final Tax Credit Certification MUST be submitted to the Department along with ALL required final documentation.
1) BEFORE the start of principal photography in the State, a
Form for Additional Documentation & Information MUST be submitted to the Department along with ALL required attachments. (This form is not required for Maryland Small Films)
2) BEFORE the conclusion of principal photography in the State, the Department
must approve the draft engagement letter for the independent, third-party CPA outlining sample sizes and percentages for the
Agreed Upon Procedures. The Department will determine sample sizes and percentages. (Film production entities with a total of authorized direct costs less than $250,000 are not required to complete a third-party AUP.)
• All statutory requirements must be met.
• The submitted Application for Qualification must be
complete and signed.
• The film production entity must demonstrate financing.
• The film production entity must provide acceptable evidence of national distribution.
• 50% of principal photography must occur in the State.
• Principal photography must be scheduled to begin within 120 days of receiving the Letter of Qualification from the Department, which may be extended by the Department at the discretion of the Department if any delay is caused by facts and circumstances beyond the control of the film production entity
• The total of authorized direct costs projected to be incurred in the State must exceed $250,000; or, $25,000 for Maryland Small Films.
• The film production entity must have been organized in Maryland for at least three (3) months prior to the date of application; or, for an individual, unincorporated association, sole proprietorship, or general partnership which is not registered with the Maryland State Department of Assessment and Taxation, has been in active business in Maryland for at least three (3) months prior to the date of application.
• The film production entity must be independently owned and operated.
• The film production entity may not be a subsidiary of another entity. A subsidiary is defined as an entity in which more than 50% of the shares are owned or controlled by, either directly or indirectly, another entity.
• The film production entity may not be dominant in its field of operation.
• The film production entity may not employ more than 25 full-time employees.
Maryland Film Office
Maryland Department of Commerce
401 East Pratt Street, 14th Floor
Baltimore, MD 21202
NOTE: A draft engagement letter outlining sample sizes and percentages
must be approved by the Department prior to the conclusion of principal photography on the film production activity in the State. The Department will determine sample sizes and percentages.
• ALL goods and services must be provided by a qualified vendor. A qualified vendor is a vendor that (1) Is qualified to do business in the State and, if applicable, registered and in good standing with the State’s Department of Assessments and Taxation; (2) Maintains a physical location in the State from which employees of the vendor are based; (3) Provides goods and services to the film production entity which are provided in the vendor’s historic ordinary course of business; and, (4) The goods and services provided by the vendor to the film production entity are generated from the vendor’s physical location in the State, unless generated from an on-line order. Goods or services which are specialized or technical in nature and are not reasonably available from a qualified vendor may be provided by a non-qualified vendor with the prior approval of the Department. This requirement must be met if the goods and/or services are bought and/or rented directly by the production company.
>> To request an exception, submit a
Due Diligence Form for Use of a Non-Qualified Vendor.
• The total direct costs may not include any salary, wages or "other compensation" paid to an individual who receives more than $500,000 in total compensation in connection with the film production activity. Compensation includes any payments of wages and/or benefits made to the individual whether paid directly to the individual through cash or a payroll company OR paid to the individual as a loan out or personal services corporation. "Other compensation" includes employer fringes and payments made directly to the employee (i.e., per diem, housing allowance, travel allowance, meal allowance, car allowance, cell phone allowance, kit/box rental, relocation fees, etc.). Salary, wages and "other compensation" are included in calculating the $500,000 threshold. If that $500,000 threshold is reached, then no costs, including the "other compensation," qualify. In addition, the $500,000 in salary, wages or "other compensation" is for the length of the production activity (prep, pre-production, principal, post); not just for time in Maryland.
• Direct costs must be PRO-RATED based upon the time personnel or materials are IN Maryland and working or used in connection with the film production activity. Costs such as insurance premiums will be considered as authorized direct costs for the portion allocable to the time spent in Maryland.
• The total direct costs may not include costs associated with filming outside of Maryland (filming in Washington, DC,
does not qualify). Costs paid in a lump sum for activities occurring both in and out of the State must be
PRO-RATED for the time and costs allocable to the
time in Maryland only.
• The total direct costs must be reasonable and negotiated at arms-length.
• Direct costs may only be attributed to the film production activity once.
• Direct costs must be the NET cost of the goods or services, i.e., security deposits must be netted out, etc.
• For all materials or goods with an initial cost greater than $1,000, the direct cost will be the initial cost of the material or good less its value, or resale, upon the completion of the film production activity in the State.
• Only travel expenses
INTO Maryland are authorized as a direct cost. Thus, the end point of that leg of travel must be in Maryland. The cost of round trip fares into Maryland would be divided in half.
• Either a relocation fee
OR housing/living allowance is authorized as a direct cost, not both.
• The total direct costs may not include costs for entertainment, gifts or gratuities or any costs coded as such.
• The total direct costs may not include costs for the purchase of vehicles or other items which are for personal use.
• The total direct costs may not include costs for any materials, goods or services that have been recouped by any insurance policies.
• The total direct costs may not include costs for taxes and fees paid to other jurisdictions, including the Federal Government.
• The total direct costs may not include costs for penalties, fines, overages or similar costs.
401 East Pratt Street, 14th Floor | Baltimore, MD 21202