Will tax credits bring more film and TV production to Minnesota?

Bringing more film production to Minnesota is no easy task.

Netflix’s reality dating show “Love Is Blind” earned a Minnesota tax credit of more than $444,000 in January, and tax credits help attract film and TV productions to the state.

For some, the Minnesota Film Production Tax Credit program, started in 2021, has allowed them to make a living in the state and industry they love. For others, the program’s $1 million spending minimum has been a barrier to tax credit eligibility. Still, some say those disappointed by the minimum are looking for money from the wrong places.

Film productions that spend a minimum of $1 million in Minnesota are eligible for a tax credit of up to 25%. If a movie spends $10 million, it can receive a $2.5 million tax credit. If the studio, producer or whoever is receiving the credit doesn’t have $2.5 million in taxes to pay, they can sell the tax credit.

A bank, corporation or other tax-paying entity can buy the credit at a discounted rate, saving money on taxes and helping fund the film, said David Malver, senior vice president of production finance at 101 Studios based in the Los Angeles area.

Some in Minnesota’s film industry have criticized the tax credit, saying the minimum spend is too high, pricing out smaller films while restricting larger films with limits on spending for talent like writers, actors, producers and directors.

People in the film industry complained about the state’s film tax credit at a Jan. 8 town hall held by Explore Minnesota Film, the state office that administers the film tax credit program.

Local filmmakers found comments by Melodie Bahan, Explore Minnesota Film’s deputy director, at the town hall discouraging and insulting — implying some Minnesota filmmakers aren’t professionals and many have to work day jobs, Minnesota-based director Nick Swedlund said.

“I feel devalued and overlooked,” he said.

Bahan was unavailable for comment, Explore Minnesota Film spokesman Chris Morgan said.

After the meeting, Andrew Peterson, executive director of the St. Paul-based FilmNorth, which supports local filmmakers, wrote an open letter criticizing the tax credit as exclusionary to independent Minnesota filmmakers and called comments made at the Jan. 8 town hall disparaging.

After the meeting and a change.org petition calling for new leadership at Explore Minnesota Film, the organization’s executive director, Lauren McGinty, announced Jan. 23 that Bahan would be leaving the deputy director job in March.

“We need someone who’s done this successfully before, or who has a career making movies and knows what it takes,” Swedlund said.

That $1 million minimum has cut off at the knees a lot of independent films that might film in Minnesota, Swedlund said.

“Some people get lucky out of the gate and they’re making big-budget stuff pretty quick,” he said. “But for the rest of us, it’s like, ‘I’ve been climbing this ladder for 17 years, and my own local film office has chopped the ladder short because I can’t jump up to that million-dollar range.‘”

While smaller, independent filmmakers don’t have state funding right now and Explore Minnesota Film was established after the $1 million minimum was set, McGinty said Explore Minnesota Film wants to take local filmmakers' funding concerns to the administration.

While $1 million might sound like a lot to most people, it’s pennies in the film industry. Brian Simpson, local set designer and board member of the International Alliance of Theatrical Stage Employees, said filmmakers making projects under $1 million should be looking for art grants, not business tax credits. He also thinks losing Bahan will only slow down the process of bringing film to Minnesota.

Simpson, who worked on creating the tax credit program, said the spending minimum promotes productions that will spend more time and money in Minnesota and offer steady income and benefits to workers.

Explore Minnesota Film’s ideal film project is in the $5 million to $10 million range, McGinty said.

The Minnesota film tax credit could be more competitive with other states with a lower minimum spend and a reduced limit on spending for talent, Peterson said.

Dan Cummings, a filmmaker from Minnesota who lives and works in New Mexico, said he moved out of state because he thinks Minnesota is primarily built around commercial film production. Most of the films Cummings makes are in the $1 million to $6 million range. New Mexico has a 40% maximum tax credit amount for qualified spending.

“Of my 10 films I’ve done in the last four years, I tried to bring half of them to Minnesota, and I was in constant communication with Jill [Johansen, incentives specialist at Explore Minnesota Film], saying, ‘Hey, have the incentives changed?’” Cummings said. “And they hadn’t changed to make it competitive for any of my projects, so I haven’t been able to bring a single one there.”

Since 2022, 14 projects have received the state film tax credit, for more than $5.1 million in tax credits. Just last year, New Mexico, which doesn’t have a spending minimum, had 62 projects that spent a total of $740.4 million in the state.

With two productions receiving credit in 2025 so far, Minnesota already has given out more than $712,000 in tax credits, over 43% of the tax credits distributed in 2024.

There’s more than $76 million in the Minnesota Film Production Tax Credit Program for 2025.

The effectiveness of the Minnesota film tax credit program likely won’t be fully visible for 10 to 15 years, said Malver, of 101 Studios.

“Developing a film or TV project from scratch and raising the necessary financing takes time,” he added.

Minnesota filmmaker Megan Huber produced two projects in the $1.2 million to $1.4 million range in the state — 2022’s “Merry Kiss Cam” and “The Fun-Raiser,” which hasn’t yet been released. Both films received Minnesota film tax credits.

“It’s a long process, and I think we’re at the very beginning of that process, but we’re in a great position as a state,” Huber said.