Can I Transfer My US State Film Tax Credit? Here’s What You Need to Know

Which States Allow Credit Transfers?

The major US incentive states — Georgia, New Jersey, Illinois, and Louisiana — all allow direct credit transfers to third-party buyers. New York operates a refundable model rather than a transfer model: instead of selling to a third party, you can claim a refund from the state directly if
you have no offsetting liability.

California allows transfers with some restrictions — credits can be sold to other California taxpayers or, in some cases, transferred back through the state’s own program.

The key distinction across all these states is between:

• Transferable credits: You sell to a private third-party buyer at a negotiated rate
• Refundable credits: The state pays you back directly, at full face value
• Hybrid programs: Some states allow both, or have a state buyback as a floor (Louisiana)

For production companies in a loss position or domiciled outside the incentive state, both mechanisms achieve the same result — cash in exchange for a credit you couldn’t otherwise use.

What Do You Need to Have in Order?

To transfer a credit, you’ll typically need the following:

1. An audited and certified credit
   Before a credit can be transferred in most states, it needs to go through an audit and certification process. This involves a CPA firm (often one registered specifically with the state program) reviewing your production expenditures and certifying that the claimed amounts are accurate.
   The certification process takes time — typically 3–9 months post-production, depending on the state and the size and complexity of the production. You can begin exploring your transfer options before the audit is complete, but the transaction typically closes once certification is in hand.
2. Proper documentation
   You’ll need your production’s expense records, any co-production agreements, documentation of in-state spend, payroll records for qualifying labor, and your audit certification. Your buyer (or their counsel) will review these as part of due diligence.
3. A transfer agreement
   The actual transfer is documented through a legal agreement that assigns the credit to the buyer. The structure varies slightly by state — some states require a notification or registration of the transfer with the relevant state agency, others simply require the buyer to reference the transfer on their tax filing.

Common Misconceptions

“Transfers are only for big studios.”

Not true. The transfer mechanism works for any company with a certified credit, regardless of size. Independent production companies and owner-operators regularly transact in the secondary market. The minimum transaction size depends on the buyer’s appetite, but credits as small as $200,000–$300,000 can be transferred through the right channels.

“I have to find the buyer myself.”

You don’t. The secondary market has brokers, platforms, and intermediaries who maintain networks of qualified buyers and manage the matching and transaction process. The complexity of finding a buyer is a solved problem — the question is which channel gives you access to the most qualified buyers at the best rates.

“The process takes years.”

The audit and certification process takes time, but the transfer transaction itself — once you have a certified credit and a qualified buyer — typically closes in 30–90 days. The longest part of the process is usually waiting for certification, not the transfer itself.

“My company isn’t based in the US, so I can’t participate.”

Credit eligibility is based on where you shoot, not where you’re domiciled. A UK-headquartered production company that shoots in Georgia earns Georgia tax credits on the same terms as a Georgia-based company. The transfer mechanism is equally available to them. The only added complexity is that the transfer proceeds need to be reported correctly in the relevant jurisdictions — a matter for your tax advisors.

How Are Credits Priced?

Credits typically trade at a discount to face value. The exact rate depends on the state, credit size, current market conditions, and the buyer’s specific tax profile — but as a general reference point, credits in major states often trade in a range from 88 to 96 cents on the dollar.

The discount compensates the buyer for their tax savings on the spread. From the seller’s perspective, receiving 90 cents on the dollar in cash now is almost always preferable to sitting on a credit that may take years to absorb — or never gets absorbed at all.

Louisiana’s state buyback program sets a floor for that state specifically — the state will purchase credits at a fixed rate (typically around 85–88 cents on the dollar) if no private buyer is found. This floor doesn’t exist in other states, which is why having access to a wide buyer network
matters.

What’s the Right Next Step?

If you have transferable credits sitting unused — from a production that’s wrapped, or one that’s currently in post — your first step is understanding what they’re worth in the current market.

If your credits are transferable and sitting unused, find out your options in 5 minutes at vitrina.ai/credits.