Georgia Department of Revenue Makes Changes to Film Tax Credit Audit Process

Photo credit: Mark Redman

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. 

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 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. 

“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.” Chelsea Spivey, Revolution Entertainment Services, Senior Director, New Business Development & Production Incentives

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.

  
  

The Georgia Screen Entertainment Coalition (GSEC) is proud to have played an active role in advocating for these changes on behalf of our members and Georgia’s film industry. Through close collaboration with state officials and agencies, GSEC has worked to resolve challenges and ensure the long-term success and vitality of the industry.