Tax credits essential for latest feature film

Film industry insiders say Alaska’s film production tax credit is essential to continuing production in state, as it offsets some of the unavoidable costs associated with doing business in Alaska.

“The Frozen Ground,” a feature film that depicts the 1983 manhunt for serial killer Robert Hansen, was filmed almost exclusively in Alaska, Director Scott Walker said, and the tax break helped him persuade the film’s financial backers to make it in Alaska.

“I first came up here (to Alaska) in February of 2009 and when I went to some of the filming locations it became clear, to me anyway, that the only way to make the film was to make it here,” Walker said. “The reality is if we wouldn’t have had the tax credit I wouldn’t have had a leg to stand on to argue my case.”

Walker, producer Janet Fleming and several members of the cast answered questions from an audience after a private showing of “The Frozen Ground” hosted by the Alaska Film Group Sept. 13 at the Bear Tooth Theatrepub in Anchorage.

The film, featuring Nicholas Cage and John Cusack, was released Aug. 23.

Fleming told the theatre audience that early plans had a majority of the filming being done in Michigan because of production ties to the state. The essential shots of Southcentral Alaska landmarks were going to be done in two weeks, she said, instead of the five months the crew ended up spending here.

Plans changed when it was determined how much could be saved, particularly through the Alaska-hire portion of the tax credit.

The film tax credit “is the reason we were here,” Fleming said. 

The Alaska Film Office arm of the Department of Revenue administers the credit on business and payroll taxes associated with film production. To qualify for the tax credit, up to 58 percent, qualified in-state expenditures must exceed $75,000. The Alaska Film Incentive Review Commission must also approve the production content before the tax credit can be awarded.

It is available for broadly defined documentary, commercial and video productions, according to the Film Office.

The base credit is 30 percent for standard expenditures. Wages paid to Alaska residents qualify for a 50 percent credit, while non-resident wages paid for work done in Alaska can receive a 5 percent credit. Expenses incurred while filming in a rural location get another 6 percent and off-season filming from October through March adds 2 percent.

Outside of the movie realm, the first scripted TV series that films 16 episodes in Alaska will qualify for an additional 6 percent credit, according to the Film Office.

Fleming said “The Frozen Ground” staff took full advantage of the Alaska-hire benefit by making sure 70 percent of their payroll went to Alaska residents.

The many layers to the tax credit made up for the fact that almost all of the equipment needed to make the movie had to be shipped to north — adding a significant expense. On-location filming in the Lower 48 is usually done with rented equipment, Walker said, a service that is hard to find in Alaska.

“Most of the equipment we needed we had to scale back massively,” he said. “We had to load our equipment on a truck from Los Angeles to Seattle and put it on a barge. And literally, as I was saying cut on the last shot it was being loaded back on a truck.”

Alaska Film Group board member Randy Daly said at “The Frozen Ground” showing that the tax credit can help build a film industry base in Alaska by getting industry executives into the state and showing them what Alaska has to offer for the big screen.

“I think Alaska is a perfect place for storytelling, and film in particular,” Daly said.

The industry can take advantage of the natural resources without imparting a significant environmental impact while generating long-term business for the state, he said.

NANA Corp., which has a minority interest in Anchorage-based Evergreen Films recently worked with technology approved by film icon James Cameron on “Walking with Dinosaurs 3D.” While it is an animated film, much of the live background scenery was shot in Alaska.

“Walking with Dinosaurs 3D” is set to be released Dec. 20 and the trailer can be viewed online.

Fleming said “The Frozen Ground” experience in the state has the crew members wanting to work here again.

“All of us are sort of desperately seeking new material to come back (to Alaska) with,” she said. 

Elwood Brehmer can be reached at