A company is eligible if it:

1. Is primarily (more than 50%) engaged in the business of producing motion pictures,

2. Has the lawful rights to produce the motion picture,

3. Has a physical office and bank account in Arizona,

4. Begins production within 90 days of the pre-approval date,

5. Spends Arizona production costs of at least $250,000, and

6. Employs Arizona residents in its motion picture productions, as follows:

· In 2007, at least 35% of the full-time employees working in this state must be Arizona residents,

· In 2008 thru 2010, at least 50% of the full-time employees working in this state must be Arizona residents.

Savings

Transaction Privilege Tax (TPT) Exemption on:

• Purchased machinery, equipment and other tangible personal property,

• Job printing, embossing, engraving and copying,

• Leased or rented lodging space,

• Sales of catered food, drink and condiments, and

• Construction contracts for buildings and other structures.

Use Tax Exemption - on machinery, equipment and other tangible personal property.

Income Tax Credit - a transferable Arizona income tax credit.

A qualified company may realize the following tax savings:

• TPT exemptions of approximately 6% off of purchases.

• Use tax exemptions of approximately 5% off of out-of-state purchases.

• Income tax credits equal to 20% or 30% of the company’s investment in eligible Arizona production costs.

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