Tennessee's incentive works like a cash rebate, but legally it's a grant. The production company signs a grant contract with the Tennessee Department of Economic and Community Development (ECD), spends the money, gets audited, and receives 25% of its qualified Tennessee expenditures back. Nothing is sold and there's no tax return involved, which is why productions without a Tennessee tax footprint can use it.
The effective date
The rule that costs productions the most money is the contract date. Nothing incurred before the grant contract has an assigned effective date and is fully executed counts toward the grant. The sequence runs:
- Register on Form A (with the Annex I due diligence questionnaire) and receive a Certification of Conditional Eligibility (CCE) from the Tennessee Entertainment Commission.
- Sign the grant contract with ECD. The commission says this typically happens two to four weeks after the CCE.
- Only spending after the contract's effective date is eligible.
If your line producer opens a Nashville office, pays location deposits, and puts a casting director on payroll before step 2, those costs are lost. Build the contract date into the prep calendar the same way you'd build in a tech scout.
What counts, and the wage limits
Qualified spend covers pre-production, principal photography, and post incurred in Tennessee: goods and services bought from Tennessee vendors, payments to Tennessee residents, and payments to nonresidents once approved. Wage lines have per-person limits:
| Worker | Counts toward the grant |
|---|---|
| Tennessee resident | First $500,000 in wages, salaries, fees, per diem, fringe |
| Nonresident | First $250,000, pending approval |
| Vendor spend | 25%, no per-item limit |
Appendix B of the TEC Production Incentive Guidelines is the list your accountant will code against. Download it before you lock the chart of accounts.
A $1,000,000 feature and a $5,000,000 series
A $1,000,000 feature shooting in Knoxville spends $700,000 of it in Tennessee after the contract date: $260,000 in resident wages, $40,000 to a nonresident DP (approved), and $400,000 with Tennessee vendors.
- Qualified spend: $260,000 + $40,000 + $400,000 = $700,000
- Grant: 25% x $700,000 = $175,000
A $5,000,000 limited series spends $3,850,000 in Tennessee, including a nonresident lead paid $600,000. Only $250,000 of that salary counts, so $350,000 comes out.
- Qualified spend: $3,850,000 minus $350,000 = $3,500,000
- Grant: 25% x $3,500,000 = $875,000
There's no per-project cap to cut that number. The constraint is funding: the commission says the grant is subject to ECD's available funds and discretion, and the Film/TV Fund depends on annual legislative appropriations. If the budget grows mid-production, file Form D to request an additional reservation. Increases have to be approved in writing by the ECD Grants Committee, and spending beyond your reservation without approval isn't guaranteed.
Before payment
The grant requires a CPA audit (the forms package includes Appendix F on agreed upon procedures testing) and a screen credit using the Filmed in Tennessee logo. The grant is refundable but not transferable or carried forward. ECD can terminate a grant contract if a production tries to get around the guidelines, so treat Appendix B as binding.
Other money on the table
The commission also lists a qualified production credit that can offset up to 50% of franchise and excise tax liability (Tenn. Code Ann. 67-4-2109(j)(2)), along with a sales tax exemption on goods and services used in the production. Hotel stays of 30 continuous days can qualify for a rebate of hotel occupancy taxes, and 90 days for the state sales tax on the room. The commission also says there is no state income tax on wages, no state permitting fee, and that most state-owned property is free to film on.
Tennessee against its neighbors
Georgia, Kentucky, and North Carolina all border Tennessee. Virginia pays a 15% base refundable credit with extra money for resident payroll, and its $250,000 minimum is lower than Tennessee's $500,000. Put your numbers in the incentive calculator, read how film tax credits work for the difference between grants and credits, and compare states on the incentives hub.
Storiara's Funding page can apply an incentive estimate to a project budget based on its locations and shoot days. It doesn't know your grant contract date or the per-person wage limits, so adjust the estimate by hand.