Connecticut Administrative Code
Title 12 - Taxation
217jj - Film Production Tax Credit Program
Section 12-217jj-8 - Allocation of costs
Universal Citation: CT Reg of State Agencies 12-217jj-8
Current through September 9, 2024
(a) Real Property
(1) An applicant owning or
leasing real property used in connection with a qualified production may
allocate a portion of the total ownership or leasehold costs related to such
asset to the production expenses or costs in the detailed cost report under one
of the following allocation methods at the election of applicant:
(A) Average lease value method
(i) The applicant may utilize deemed
operational and ownership costs based on the average lease value
method;
(ii) To arrive at the total
deemed operational and ownership costs, the applicant must multiply the average
per day lease value of comparable real property by the number of days the asset
is used in connection with the production.
(B) Actual operational and ownership costs
times production square footage ratio:
(i) An
applicant may allocate to the production expenses or costs a portion of the
operational and ownership costs of real property by multiplying the production
square footage ratio by actual operational and ownership expenses related to
the real asset;
(ii) The production
square footage ratio is obtained by dividing the square footage of the real
asset principally utilized in connection with a production by the total square
footage of the real property owned by applicant; and,
(iii) Actual operational and ownership costs
of real property may include, but not be limited to: utilities, real estate
taxes, depreciation, insurance, property management fees, mortgage expense, and
repairs and maintenance.
(b) Personal Property
(1) An applicant purchasing personal property
which is not eligible for the credit provided in section
12-217kk
of the Connecticut General Statutes, shall allocate the cost of such personal
property pursuant to class life categories and current depreciation rules
promulgated by the Internal Revenue Service;
(2) The applicant shall divide the cost of
the item of personal property by the applicable class life published by the
Internal Revenue Services to determine an annual expense which shall then be
multiplied by the ratio obtained from dividing the number of days the item of
personal property was actually in use in this State in connection with a
qualified production by 365.
(c) Costs for services or wages
(1) Costs for personal services or wages paid
by applicant on a daily or hourly basis shall be allocated to the qualified
production based on the time the services or work were actually performed in
this State;
(2) When an applicant
incurs costs for personal services performed partially in this State and such
costs are not paid on a daily or hourly basis, then the applicant shall
allocate such costs to the qualified production based on the ratio of the
number of days the services were performed in this State over the total number
of working days the personal services were to be provided to
applicant.
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