The Virginia film and TV tax incentive is a refundable state tax credit worth 15% of a production’s qualifying Virginia expenses, rising to 20% if filming takes place in an economically distressed area. On top of that, productions earn an additional 10% to 20% credit on wages paid to Virginia residents. The minimum spend to qualify is $250,000 in Virginia, and the total credits the state issues are capped at $6.5 million per fiscal year. The credit is currently set to expire for taxable years beginning on or after January 1, 2027.
Credit Rates and the $250,000 Minimum
The Motion Picture Production Tax Credit lives in Virginia Code ยง 58.1-439.12:03.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit The base rate is 15% of qualifying Virginia expenses, or 20% if the production films in an economically distressed area of the Commonwealth.
A separate payroll credit stacks on top:
- 10% of wages paid to Virginia residents when total Virginia spending falls between $250,000 and $1 million.
- 20% of wages paid to Virginia residents when total Virginia spending exceeds $1 million.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit
So a production spending $1.5 million in Virginia outside a distressed area would collect 15% on all qualifying expenses plus 20% on the aggregate payroll of its Virginia hires. Because the credit is refundable, the state pays the balance in cash if the production owes no Virginia income tax. The statewide pool is capped at $6.5 million per fiscal year, allocated across all approved productions.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit
What Counts as a Qualifying Expense
Qualifying expenses are amounts spent in Virginia on goods, services, compensation, or wages tied directly to the production. That includes site rentals, set construction, soundstage rental, equipment purchases and leases, film processing, editing, post-production, and payments to in-state contractors and vendors.2Virginia Film Office. Virginia Motion Picture Tax Credit Guidelines
Two scoping rules matter. Tangible goods must be physically supplied, consumed, or used in Virginia, and services must be performed in the state. For any single item costing $25,000 or more, the qualifying amount is the purchase price minus the item’s fair market value at the end of production. A $40,000 piece of equipment worth $30,000 on the resale market when the shoot ends counts as $10,000 of qualifying spend.2Virginia Film Office. Virginia Motion Picture Tax Credit Guidelines
Virginia doesn’t split above-the-line from below-the-line pay. Producers, directors, actors, stunt performers, and crew all qualify, but compensation per individual is capped at $1 million. If a lead actor earns $3 million, only the first $1 million enters the credit calculation.2Virginia Film Office. Virginia Motion Picture Tax Credit Guidelines
Productions That Don’t Qualify
Several project types are excluded by statute regardless of spend:
- Political advertising
- Television news programs
- Live sporting events
- Reality television
- Productions containing obscene material1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit
Feature films, scripted television series and pilots, documentaries, commercials, music videos, animation, and digital interactive media such as video games are all eligible. For episodic television, an entire season counts as one production.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit
How to Apply, and When
Applications go to the Virginia Film Office at least 30 days before production begins and must include the script, the production budget, and the shooting schedule.3Virginia Film Office. Application Process Once principal photography has started, applications can’t be considered, so missing the 30-day window means losing the credit entirely.
Every approved applicant signs a memorandum of understanding with the Virginia Tourism Authority setting the estimated Virginia spend, the production timeline, and the maximum credit allocated to the project. Those figures are binding targets, and significantly undershooting them can reduce the final credit.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit The production must also make a best-faith effort to shoot at least 50% of its principal photography days in the Commonwealth.2Virginia Film Office. Virginia Motion Picture Tax Credit Guidelines Pre-production must start within 90 days of approval, and projects spanning more than one tax year need a separate application for each year.4Wrapbook. Production Incentives in Virginia
Certification and Getting Paid
After the shoot wraps, the Virginia Tourism Authority reviews whether the production hit the terms of the memorandum, then certifies the final credit amount to the taxpayer and the Tax Commissioner, specifying the fiscal year of the refund.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit The production then claims the credit on its Virginia income tax return for the year the Virginia activities were completed, with the production name, a description, and a detailed accounting of every qualifying expense. The refund check typically arrives roughly 60 days after the return is filed.5Virginia Film Office. Incentive FAQs
Keep clean records throughout filming: payroll documentation for every Virginia hire, vendor receipts and invoices showing dates, amounts, and Virginia addresses, and internal ledgers broken out by spending category. Most delays trace back to bookkeeping that doesn’t line up with the memorandum’s projections.
Governor’s Motion Picture Opportunity Fund
A separate program, the Governor’s Motion Picture Opportunity Fund, provides grants at the governor’s sole discretion to productions using Virginia employees, resources, and services. Funding comes from legislative appropriations rather than the tax code, so availability shifts year to year. Grants are paid on a reimbursement basis after the production documents that it met its contracted employment and spending commitments, with the payment amount tied to how closely the production hit those targets.6Virginia Film Office. Governor’s Motion Picture Opportunity Fund Checks typically issue within about 30 days of verified documentation.7Virginia Film Office. Virginia Production Incentives The grant can supplement the tax credit or substitute for it on projects that fall below the $250,000 threshold.
Lodging Tax Exemption for Long Stays
Productions booking extended hotel or motel stays get a side benefit. Stays of 90 or more consecutive days are exempt from the state lodging tax for the entire stay.8Virginia Film Office. Incentives Most localities also exempt stays of 30 or more consecutive days from their local transient occupancy tax, though the specifics vary by jurisdiction, so confirm with the local film liaison before budgeting.9Virginia Film Office. Tax Exemptions
The 2027 Sunset
Under current law, the credit is available only for taxable years beginning before January 1, 2027.1Virginia Code Commission. Virginia Code 58.1-439.12:03 – Motion Picture Production Tax Credit A bill introduced in the 2026 legislative session proposed extending the sunset to January 1, 2032, but it has not been signed into law. Any production building a budget around the Virginia credit should confirm its current status with the Virginia Film Office before committing.