Alabama Administrative Code
Title 281 - ALABAMA DEPARTMENT OF COMMERCE, FORMERLY ALABAMA DEVELOPMENT OFFICE AND ALABAMA TOURISM DEPARTMENT/ALABAMA FILM OFFICE
Chapter 281-3-1 - ALABAMA FILM OFFICE INCENTIVES
Section 281-3-1-.08 - Production Expenditures

1. There is a rebuttable presumption that an expenditure paid or incurred by a Qualified Production Company to an Alabama-Based Company shall not qualify as a Production Expenditure if:

2. Example: A Qualified Production Company needs a widget. Widgets are not available within the State of Alabama. An Alabama-Based Company, which is unrelated to the Qualified Production Company and has had its principal place of business physically located in the State of Alabama for the past 3 years, may import the widget into Alabama and then rent the widget to the Qualified Production Company for use in a State-Certified Production. If the procurement of the widget, or similar device, is in the normal course of the Alabama-Based Company's business, the payment to the Alabama-Based Company by the Qualified Production Company for the use of the widget shall qualify as a Production Expenditure, as shall any mark-up, premium, or other fee charged by the Alabama-Based Company associated with the procurement of the widget.

3. A Qualified Production Company may submit a written application or request to the Office that this presumption not be applied with respect to a particular expenditure paid to an Alabama-Based Company, and the Office shall consider such written application or request on a case-by-case basis.

1. The Qualified Production Company shall maintain records confirming the residency of all employees in order to determine the proper percentage of payroll to apply to the Qualified Production Company's Rebate. The Declaration of Residency Form provided by the Office shall constitute indicia of an employee being a Resident of Alabama.

2. Salary, wages or other compensation for services which qualify as an Above-the-Line Expenditure paid to a nonresident of Alabama for services performed within Alabama associated with a State-Certified Production, on which Alabama income tax has been withheld and paid or estimated income taxes have been paid, qualify for a Rebate equal to 25% of the first $1,000,000 payment to each nonresident person multiplied by the ratio of total number of days worked in Alabama on the State-Certified Production to the total number of days of employment by the Qualified Production Company or work otherwise performed on the State-Certified Production. Salary, wages or other compensation for services which qualify as a Below-the-Line Expenditure paid to a nonresident of Alabama for services performed within Alabama associated with a State-Certified Production, on which Alabama income tax has been withheld and paid or estimated income taxes have been paid, qualify for a Rebate equal to 25% of the first $500,000 payment to each nonresident person multiplied by the ratio of total number of days worked in Alabama on the State-Certified Production to the total number of days of employment by the Qualified Production Company or work otherwise performed on the State-Certified Production. Notwithstanding the above, if a nonresident person receives salary, wages or other compensation for services that constitute Above-the-Line Expenditures and Below-the-Line Expenditures, the total amount of payments eligible for the 25% Rebate shall not exceed $1,000,000.

3. Payments to a Loan-Out Company that employs a nonresident person providing services on a State-Certified Production, where such person owns the Loan-Out Company in whole or in part, shall qualify as Production Expenditures for the first $1,000,000.00 of Above-the-Line Expenditures to the extent that the payments directly relate to the performance of services within the State of Alabama on a State-Certified Production; provided that Alabama estimated state income taxes have been paid related to such payments, by either the Loan-Out Company or a third party payroll company. Payments to a Loan-Out Company that employs a nonresident person providing services on a State-Certified Production, where such person owns the Loan-Out Company in whole or in part, shall qualify as Production Expenditures for the first $500,000.00 of Below-the-Line Expenditures to the extent that the payments directly relate to the performance of services within the State of Alabama on a State-Certified Production; provided that Alabama estimated state income taxes have been paid related to such payments, by either the Loan-Out Company or a third party payroll company. Notwithstanding the above, if a Loan-Out Company receives compensation for the services of a nonresident person who receives salary, wages or other compensation for services that constitute Above-the-Line Expenditures and Below-the-Line Expenditures the total amount of payments eligible for the 25% Rebate shall not exceed $1,000,000. A payment to a Loan-Out Company shall be a Production Expenditure qualifying for a Rebate of 35% if such person for whose services payment is made is a Resident of Alabama.