April Rules Day: Georgia Department of Revenue Streamlines Film Tax Credit Audit Rules

Effective March 12, 2025, the Georgia Department of Revenue (“GADOR”) issued Policy Bulletin IT-2025-01 implementing various updates to its Mandatory Film Tax Credit Audit Program.

Specifically, the GADOR made the following changes to its Agreed Upon Procedures governing audits of film projects seeking qualification for income tax credits:

• Updating the list of standard business records to be requested substantiating qualifying expenditures;
• Expanding the forms of acceptable documents and information related to loan-out agreements for activities related to principal photography;
• Various changes to the statistical sampling methods that examine airfare, lodging, and asset-use; and
• Adjusting insurance costs to reflect industry pricing standards.

The overall impact of these changes is intended to streamline the audit process by permitting more cost-effective reporting (such as by allowing consolidated Excel reports), introducing materiality thresholds for certain required information, and by allowing more statistical approaches to various categories of expenditures.

In effect, these changes are expected to reduce audit times and result in more efficient audits, which should reduce costs and burdens on both film companies and the state alike.