What every producer needs to know before locking location in 2026.
- Georgia leads the 2026 film tax incentive landscape — no annual cap, fully transferable credits, plus a new post-production credit that took effect January 2026.
- California Program 4.0 raised its base credit to 35% and nearly doubled its allocation to $750M/year — the biggest change to state film tax credits in California in years.
- Illinois SB 1911 (signed Dec 2025) raised the base credit to 35% with stackable bonuses, extended the program through 2039, and expanded non-resident eligibility.
- Louisiana did not sunset. Act 44 restructured the program — the annual cap dropped to $125M, but per-project and per-person limits were removed entirely.
- Iowa and Wisconsin re-entered the market in 2025, offering 30% production tax credits and opening new location options for nimble productions.
- Apply before you spend. Most states require pre-certification before principal photography begins. Expenses incurred before approval typically don't qualify for film tax credits.
If you’re producing a union commercial in the U.S., location isn’t just a creative decision—it’s a financial one. States offer wildly different tax incentive programs that can make or break your bottom line. These are real dollars flowing back into your budget—not line-item fluff, but the kind of savings that open up creative possibilities, keep timelines intact, and make the difference between breaking even and pulling ahead.
Yet producers are routinely blindsided by the complexity. Eligibility rules, minimum spend thresholds, application deadlines—every state has its own system, and one misstep can mean walking away from serious savings. Or worse, watching your competition shoot the same concept for less money in a smarter location.
Below, we break down how tax incentives actually work, which states offer the best returns, and when it’s worth navigating the red tape. If you’re spending production dollars without understanding this piece of the puzzle, you’re leaving money on the table.
If you’re producing a union commercial in the U.S., location isn’t just a creative decision. It’s a financial one. States offer wildly different film tax incentive programs, and the gap between a well-planned shoot and a poorly-planned one can run into six figures. These are real dollars flowing back into your production budget, the kind that give you room to hire the right crew, extend your shoot day, or invest in post.
What makes this complicated is that the programs change. Several states updated their incentive structures in 2025 and early 2026, and a few common assumptions producers are still working from are now wrong. In this guide, we’ll walk through how film tax credits work, which states offer the best returns heading into 2026, and the mistakes that consistently cost productions money. We’ll also flag the specific figures that have changed since this post was first published.
What Are Film Tax Incentives?
Film tax incentives are financial programs offered by U.S. states to attract film, television, and commercial productions. By offering meaningful cost savings, states compete to bring production dollars and the jobs that come with them into their local economies.
For commercial productions, these programs reduce net cost, improve budget flexibility, and can directly influence where a project gets filmed.
The programs fall into four main categories:
- Tax Credits: A percentage return on qualified in-state production expenses. Credits can be refundable (the state pays you the difference in cash if the credit exceeds your tax liability) or transferable (you sell unused credits to another in-state taxpayer for cash).
- Cash Rebates: Direct reimbursement of a portion of approved spending after the project wraps. Easier to quantify during pre-production budgeting.
- Grants: Funds that don’t need to be repaid, typically available for productions with high local economic impact.
- Sales Tax Exemptions: Waivers on state sales tax for eligible goods and services including equipment rentals, set construction, wardrobe, and similar production costs.
Understanding which type a state offers matters as much as the percentage. A 30% non-transferable credit is a very different instrument than a 30% cash rebate. We’ll address this distinction in each state breakdown below.
How Do Film Tax Credits Work?
The process is fairly consistent across states, even when the specifics vary. Here’s the general structure:
1. Qualify the Production
Most states require producers to apply before principal photography begins. Expenses incurred before approval typically don’t qualify. Your application will include a production schedule, a budget breakdown, and documentation showing how your shoot meets the state’s thresholds.
Common qualification requirements include:
- A minimum in-state spend (often $500,000 or more)
- Use of local crew and vendors
- Employment of SAG-AFTRA or other union talent
- Lodging and purchases made within the state
2. Track Qualified Expenses
Once approved, every eligible cost needs to be documented. States require line-item records, and many require a certified audit after wrap. Common qualifying expenditures include:
- Wages paid to local crew and talent
- Equipment and vehicle rentals from in-state vendors
- Location fees, lodging, and in-state travel
- Set construction, props, and post-production services performed in-state
- Meals, craft services, and miscellaneous local purchases
Sloppy tracking mid-production is one of the most common reasons credits get reduced or denied. Category-specific line items and dated receipts from day one are non-negotiable.
3. Complete the Audit
After production wraps, you’ll submit a final cost report with supporting documentation. Many states require an independent audit by a qualified CPA before they’ll issue a credit certificate. The audit validates your claim and prevents processing delays.
4. Receive Your Incentive
How you monetize the credit depends on the program:
- Refundable Credits: A refundable credit works like an overpayment on your taxes. The credit is calculated as a percentage of your qualified in-state production spend. That credit is applied against any state income tax your production entity owes. If your tax liability is lower than the credit amount the state pays you the difference in cash. This makes refundable credits highly desirable for commercial productions, because you receive real money back regardless of your tax position. New Mexico, California, and Louisiana all offer refundable credits.
- Transferable Credits: If the credit exceeds what you owe in state taxes and the program doesn’t offer refundability, you can sell the credit to another business within the state. That business uses it to offset their own state tax liability. You receive cash, but at a discount, typically 85 to 92 cents on the dollar and only after completing the audit and executing the sale. Georgia, Illinois, and Wisconsin operate transferable credit programs.
- Non-Transferable Credits: The credit can only offset your own direct in-state tax liability. If your production entity owes little or nothing in state taxes, a non-transferable credit has limited practical value.
Some states add bonus credits for hiring local residents, shooting in rural or underserved areas, or including promotional content about the state. These stack on top of the base rate and are worth planning for specifically.
Top Film Tax Incentives by State in 2026
Program details shift year to year. The table below reflects current figures as of early 2026.
| State | Base Credit | Max Credit | Credit Type | Annual Cap | 2025–2026 Changes |
|---|---|---|---|---|---|
| Georgia | 20% | 30% | Transferable | No cap | New: Post-production credit (20%) added Jan 2026 |
| New Mexico | 25% | 40% | Refundable | $130M | Cap increased from $120M; rising to $160M by 2028 |
| Illinois | 35% | 35%+ | Transferable | No cap | SB 1911 Dec 2025: Base raised from 30%; stackable bonuses added; extended to 2039 |
| New York | 30% | 40% | Refund / Transfer | $800M + $100M indie | New indie film program; above-the-line cap removed |
| Louisiana | 25% | 40% | Refundable | $125M | Did not sunset. Restructured Jul 2025; per-project caps removed |
| California | 35% | 40% | Refund / Transfer | $750M | Program 4.0: Base raised to 35%; allocation doubled from $330M |
| Massachusetts | 25% | 25% | Transfer / Partial Refund | No cap | — |
| New Jersey | 30% | 35% | Transferable | No per-project cap | Extended through 2049; new Netflix facility in Monmouth |
| Iowa | 30% | 30% | Rebate | $4M | New: Pilot program Jul 2025–Jul 2027; first-come basis |
| Wisconsin | 30% | 30% | Transferable | $5M / $1M per project | New: Reinstated Jul 2025; effective Jan 2026 |
1. Georgia
Georgia remains the most consistently producer-friendly program in the country. Productions filming in-state qualify for a 20% base film tax credit on qualified in-state expenses, with an additional 10% available if the production includes a Georgia promotional logo in the final cut. There are no annual or per-project caps, and the credits are fully transferable.
As of January 1, 2026, Georgia expanded its program to include a 20% tax credit for post-production companies on a minimum $500,000 spend, with an additional 10% available if the underlying project was filmed in the state. This makes Georgia increasingly attractive for productions that also want to complete editorial and finishing work in-state.
Georgia’s infrastructure, including Tyler Perry Studios, a seasoned local crew base, and a well-run film office, makes the administrative side of the program easier to navigate than many competing states.
For union commercial productions: Georgia’s infrastructure supports SAG-AFTRA shoots well. Because credits are transferable rather than refundable, you’ll need a buyer for the credit, factoring the brokerage discount (typically 85-92 cents on the dollar) into your net return calculation.
Best for: TV series, feature films, and large-scale or recurring commercial shoots.
2. New Mexico
New Mexico offers a 25% base refundable film tax credit on qualified in-state spending, with opportunities to stack bonuses and reach up to 40%. Bonus tiers are available for TV series and pilots, use of certified production facilities, hiring local union crew, and shooting in rural areas.
Because the credit is refundable, productions receive cash back even without in-state tax liability. This makes New Mexico particularly accessible for productions with tighter margins. The program’s annual cap increased to $130M for fiscal year 2025, up from $120M, and is scheduled to reach $160M by 2028.
For union commercial productions: New Mexico’s refundable structure is friendly for smaller-budget union shoots. The local union crew base has grown substantially with the state’s film boom. SAG-AFTRA commercials qualify, and the bonus for local union crew hire gives you an added incentive to cast and crew locally.
Best for: Union commercials, genre films, and narrative series with recurring shoots.
3. Illinois
Illinois made the most significant changes of any state in the 2025 and 2026 cycle. Governor Pritzker signed Senate Bill 1911 into law on December 12, 2025, overhauling the state’s film tax incentive structure with retroactive effect for productions commencing on or after July 1, 2025.
Key changes under SB 1911:
- Base credit for Illinois resident labor and in-state vendor spend increased from 30% to 35%
- Non-resident crew: up to 13 qualifying positions (from 9), each receiving a 30% credit on the first $500,000 in wages
- +5% regional bonus for productions filming outside Cook, DuPage, Kane, Lake, McHenry, and Will Counties
- +5% bonus for TV series relocating to Illinois in their first season
- +5% bonus for productions implementing a certified green sustainability plan
- Airline tickets from Illinois-headquartered carriers now qualify as production expenses
- Program extended through 2039
The bonuses are cumulative. A qualifying production could access an effective credit rate well above the 35% base. The program remains uncapped with no annual limit and no per-project limit.
Illinois also maintains a hotel occupancy tax exemption in Chicago for productions staying 30 or more consecutive days, and post-production expenses continue to qualify.
For union commercial productions: Chicago’s established commercial production market makes Illinois a natural fit for union shoots. The expanded non-resident crew allowance (up to 13 positions) gives producers more flexibility on above-the-line and specialized roles. The hotel tax exemption is material for multi-week shoots. Ensure your labor setup is in place before principal photography to capture the full resident labor credit.
Best for: Commercials, television, and branded content based in or around Chicago, or productions that can take advantage of the regional bonus by shooting downstate.
4. New York
New York offers a 30% refundable film tax credit on qualified production expenses, with a 10% location bonus for projects filming in certain upstate counties. The state also maintains a post-production incentive for work completed with in-state vendors.
Governor Hochul’s 2025 to 2026 budget increased the program’s annual allocation to $800M for large-scale productions, with an additional $100M reserved specifically for independent films through the New York State Independent Film Production Tax Credit Program. The state also removed the above-the-line eligibility individual cap and multi-year payout tiers, and added more flexibility on the post-production side.
New York’s program is known for stability and strong administrative support, two things that matter as much as the percentage when you’re managing cash flow across a production.
For union commercial productions: New York’s program is well-suited to commercial shoots given its union infrastructure and vendor ecosystem. Note that commercial productions must meet New York’s minimum spend threshold and production day requirements. The program is known for stability and strong administrative support.
Best for: Urban commercials, post-heavy productions, and ongoing campaign work.
5. Louisiana
Louisiana’s program did not expire after June 2025. That language in our earlier version of this guide is now outdated. The state signed Senate Bill 232 into law as Act 44, restructuring the program rather than sunsetting it. The annual cap dropped from $150M to $125M effective July 1, 2025, but per-project caps and per-person wage limits were removed.
The base state film rebate remains 25%, with the potential to reach 40% through bonuses for in-state hires, rural filming, and local vendor spend. Louisiana Economic Development (LED) now oversees the program, taking over from the Governor’s Office of Film and Television Development.
For union commercial shoots: Louisiana is particularly cost-effective for high-spend, feature-style commercial productions. The removal of per-person wage limits is meaningful for above-the-line talent costs.
Best for: Streaming content, branded documentaries, and high-spend feature-style commercials.
6. California
California’s program changed substantially in 2025 and deserves a corrected look. Under Film and Television Tax Credit Program 4.0, the state raised its base credit to 35% (up from the 20 to 25% range cited in earlier versions of this guide) and nearly doubled the annual allocation from $330M to $750M per year for the next five years.
Credits are refundable, with independent productions also eligible for transferability. A 10% uplift is available for filming outside the Los Angeles 30-mile zone, and additional credits apply for VFX work performed in California and for qualifying local crew hires.
For union commercial productions: California’s commercial market remains the deepest in the country for union crew and talent access but it’s important to be direct here. California’s Film and Television Tax Credit Program 4.0 does not cover commercial productions. The program’s eligible project types are feature films, independent films, TV series, miniseries, and pilots. Commercials are excluded regardless of budget size. If you’re shooting a union commercial in California, plan your budget without any state incentive offset. The crew depth and infrastructure are unmatched, but you’re paying full freight.
Best for: Productions seeking California-based talent and infrastructure, with enough budget to compete for allocation.
7. New Jersey
New Jersey has become one of the more competitive mid-Atlantic options, particularly for productions that need proximity to New York without New York’s application competition. The state offers a 30 to 35% transferable tax credit with no per-project cap. The base rate is 30%, with a 35% rate available for productions that meet additional criteria including use of in-state vendors and local crew.
The state’s film infrastructure position strengthened considerably in 2025 when Netflix broke ground on a major new production facility in Monmouth County. The film incentive program itself was extended through 2049, giving productions long-term certainty that neighboring programs sometimes lack.
For union commercial productions: New Jersey’s proximity to New York City makes it logistically practical for commercial shoots that want to access the New York talent pool while qualifying for a separate incentive program. Because credits are transferable rather than refundable, you’ll need to work with a broker to monetize them. Confirm commercial eligibility with the New Jersey film office before committing to a location, as program rules continue to evolve.
Best for: Commercial and branded content productions serving the New York market that can meet in-state spend requirements and plan ahead for the credit sale process.
8. Other States Worth Watching
- Massachusetts: Offers a 25% transferable and partially refundable film tax credit with no annual or per-project cap. Productions must spend at least 75% of their budget or shoot days in-state.
- Iowa: Reintroduced a pilot film production rebate program in 2025 offering up to 30% back on qualified in-state spend. The program runs from July 1, 2025 through July 1, 2027, with a $4M annual cap. Applications are first-come, first-served. Productions that can move quickly have a real window here.
- Wisconsin: Reinstated its film incentive program in July 2025 and re-established a state film office. A 30% transferable tax credit on qualified in-state resident labor and vendor spend took effect January 2026, with a $5M annual cap and $1M per-project limit.
States with No Film Tax Incentive Program
States With No Active Film Tax Incentive
Alaska No Program
Delaware No Program
Florida
Statewide expired · some local programs
Nevada
No statewide · local only (Las Vegas)
North Dakota No Program
Wyoming No Program
Not every state competes for production dollars. The following states currently have no active statewide film tax incentive program as of 2026:
- Alaska
- Delaware
- Florida (statewide program expired; some local programs exist in Miami-Dade and Fort Lauderdale)
- Nevada (Note: Las Vegas has local incentives but no statewide program)
- North Dakota
- Wyoming
If your location scout is targeting one of these states for creative reasons, budget accordingly. There is no state incentive to offset your spend. Local programs and count-level incentives may exist; verify directly with the relevant film office before ruling out a location entirely.
Film Tax Incentives for Union Commercial Productions
Most film tax incentive guides are written with features and episodic TV in mind. Union commercial productions operate under a different set of constraints, and a few distinctions are worth understanding before you select a location.
Commercial Eligibility Callout
Not every state film incentive program covers commercial productions, and this is one of the most common and costly assumptions producers make. California’s Film and Television Tax Credit Program 4.0 does not cover commercial productions. Arkansas similarly excludes commercials. Before building any location decision around a state incentive, confirm with that state’s film office that your project type qualifies. The rate on paper means nothing if your production category is excluded.
SAG-AFTRA Eligibility and Labor Compliance
Several state programs explicitly require union-compliant labor as a condition of qualification. If your production employs SAG-AFTRA talent, your labor documentation needs to hold up under audit. That means proper contracts, accurate wage reporting , and correct benefit fund contributions.
Minimum Spend Thresholds
Most state programs require a minimum in-state spend, commonly $500,000 or more to qualify. For commercial productions with tighter budgets, this threshold can be a real barrier. States like Iowa ($4M annual cap, first come basis) and Wisconsin ($1M per-project cap) are worth watching precisely because lower-spend productions have a realistic path to qualification.
Credit Type and Cash Flow
Union commercial productions often operate on tighter cash flow timelines than feature films. The type of credit a state offers directly affects when you see money:
- Refundable credits (New Mexico, California and Louisiana): The state cuts you a check after the audit.
- Transferable credits (Georgia, Illinois, and Wisconsin): You sell the credit to an in-state buyer.
- Non-transferable credits: Can only offset your direct in-state tax liability.
Factor incentive proceeds into your cash flow plan as money that arrives well after wrap.
Common Film Tax Incentive Mistakes to Avoid
7 Ways Producers Leave Money on the Table
Click each item to mark it reviewed for your production.
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1
Waiting too long to applyMost states require pre-certification before principal photography. Expenses before approval don't qualify. Apply during pre-production.
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2
Confusing credit typesA refundable credit, transferable credit, and non-transferable credit are three different things. Know how you'll monetize before you pick a location.
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3
Sloppy expense trackingMissing invoices, unverified vendor addresses, and undated receipts result in disqualified expenses. Track by category in real time from day one.
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4
Incomplete documentation at submissionGeorgia allows 90 days post-wrap. Illinois requires detailed labor reporting for bonus tiers. Missing a deadline can cost you the credit entirely.
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5
Non-compliant labor setupPrograms require minimum percentages of local residents or union workers. Misclassifying labor or over-indexing out-of-state crew reduces or kills eligibility.
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6
Ignoring audit requirementsGeorgia mandates third-party audits for credits over $2.5M. States can claw back credits if documentation doesn't meet standards. Hire a CPA familiar with film audits.
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7
Working from last year's numbersIllinois raised its base rate. California doubled its cap. Louisiana restructured entirely. If your location decision is based on 18-month-old figures, check again before you commit.
Even producers who understand the programs well leave money on the table or lose eligibility entirely through avoidable process failures. Here’s what we see most often.
1. Waiting Too Long to Apply
Most states require pre-certification before principal photography begins. Expenses incurred before approval typically don’t qualify. Missing this step can render your entire production ineligible.
Apply during pre-production. Confirm whether the state requires conditional approval before any qualifying spend.
2. Confusing Credit Types
A 30% refundable credit, a 30% transferable credit, and a 30% non-transferable credit are three different things.
- Refundable (New Mexico, California): excess credit paid to you in cash
- Transferable (Georgia, Illinois): credit is sold to generate immediate liquidity
- Non-transferable: credit only offsets your direct in-state tax liability
Know how you’ll monetize the credit before you choose a location. Don’t assume “30% credit” means 30% cash in hand.
3. Sloppy Expense Tracking
States only credit specific, in-state expenditures. Gaps in documentation including missing invoices, unverified vendor addresses, and undated receipts result in disqualified line items.
Track by category in real time. Include proof of payment, vendor location, and production dates for every qualifying expense.
4. Incomplete Documentation at Submission
Every state has specific submission requirements: expense reports, payroll documentation, affidavits, and in many cases, a third-party audit. Missing a deadline or submitting incomplete paperwork can cost you the credit entirely.
Georgia allows only 90 days to submit post-wrap documentation. Illinois requires detailed labor reporting to qualify for bonus tiers. Know your state’s deadlines before you wrap.
5. Non-Compliant Labor Setup
Several programs require a minimum percentage of local residents or union workers. Misclassifying labor or relying too heavily on out-of-state crew can reduce or eliminate your eligibility.
For union commercial productions, that is especially important. If you’re working with SAG-AFTRA talent, your labor documentation needs to be structured correctly from day one.
6. Ignoring Audit Requirements
High-dollar credits often require third-party audits. Georgia mandates one for credits exceeding $2.5 million. States may claw back credits if documentation doesn’t meet standards.
Hire a CPA familiar with film production audits. Keep clean records of all transactions, including production dates and vendor addresses, from day one.
7. Underestimating Cash Flow Timelines
Incentive payouts, especially tax credits that need to be processed and certified, take time. Productions that expect immediate reimbursement can find themselves short mid-production.
Factor incentive delays into your cash flow plan. If you’re working with transferable credits, understand the timing and mechanics of the sale process before you need the cash.
8. Working From Last Year’s Numbers
This one is worth repeating: film tax incentive programs change. Illinois raised its base rate. California nearly doubled its cap. Louisiana restructured entirely. New states like Iowa and Wisconsin entered the picture.
If your location decision is based on figures from 18 months ago, check again before you commit.
Conclusion: Film Tax Incentives Are Complex. Your Signatory Partner Shouldn’t Be
Film tax incentives are worth the administrative effort, but only if your production stays compliant and tracks every qualified expense from the first day of pre-production. The programs are real, the savings are material, and the states competing hardest for your production dollars are actively raising their offers.
For union commercial productions specifically, the compliance stakes are higher than they are for non-union shoots. Your labor structure, payroll documentation, and benefit fund contributions are all subject to audit scrutiny. A problem in any of those areas can reduce or eliminate your incentive. Getting your back-office production support and signatory setup right before you lock location is the highest-leverage thing you can do.
CMS Productions offers back-office production support and serves as a third-party union signatory, so your labor is compliant, your documentation is clean, and your incentive application is built to hold up under audit.
Contact us to set up a consultation before your next production locks location.
FAQs
Film tax incentives by state are financial programs that offer commercial and film productions a percentage return on qualified in-state spending. The form varies: tax credits, cash rebates, grants, and sales tax exemptions, and so do the rates, caps, and eligibility requirements. Each state runs its own program independently, which is why location scouting and financial planning need to happen at the same time.
Requirements vary by state but generally include a minimum in-state spend (commonly $500,000 or more), use of local crew and vendors, union-compliant labor, and lodging purchased within the state. Most programs require producers to apply and receive pre-certification before principal photography begins. Expenses incurred before approval typically don’t qualify.
In most states, expenses incurred before pre-certification are disqualified. If you miss the application window entirely, your production may be ineligible for the full credit or any credit at all. Some states also have strict post-wrap submission deadlines. Georgia, for example, gives producers 90 days after qualifying expenses are incurred to submit documentation. There is typically no appeals process for missed deadlines.
Timelines vary significantly. Some states process credits within 60 to 90 days of audit completion; others can take six months or longer. Productions working with transferable credits need to account for the time to complete the audit, receive the certificate, and execute the sale. Plan for incentive proceeds to arrive well after wrap, not during production.
Any producer working with SAG-AFTRA talent who is not already a direct union signatory needs a third-party union signatory to run the production legally. This is common for independent producers, branded content studios, and agencies producing union commercials on behalf of clients. The signatory relationship also affects incentive eligibility: several state programs require union-compliant labor as a condition of qualification, and a proper signatory setup ensures your labor documentation holds up during audit.
Yes, most state film tax incentive programs explicitly include commercial productions among eligible project types. That said, eligibility details vary: some states exclude certain formats (Arkansas, for example, excludes commercials), while others have minimum spend thresholds that can be difficult for smaller-budget commercials to reach. Always verify commercial eligibility with the specific state program before committing to a location.
There is no single answer, the best state depends on your budget, shoot location requirements, and how quickly you need the money back. Georgia is the most consistently producer-friendly (no-cap, fully transferable, strong infrastructure). Illinois is increasingly competitive as well, especially for Chicago-based shoots. New Mexico’s refundable structure makes it accessible for smaller-based production, California’s 35% base is strong if you can get an allocation.
Yes, in many states. Illinois allows bonuses to stack for regional filming, TV reallocation, and green sustainability bonuses can all apply simultaneously. New Mexico offers bonus tiers for certified facilities, local union crew, and rural shooting. Georgia’s base 20% stacks with the 10% promotional logo bonus. The effective rate you can actually reach is significantly higher than the base.
A refundable tax credit means the state pays you cash if the credit exceeds your in-state tax liability. New Mexico, California and Louisiana offer refundable credits. A transferable tax credit means you sell the credit to another in-state taxpayer who can use it to offset their own tax liability, you receive cash but at a discount (typically 85-92 cents on the dollar) and after a sale process that takes time. Georgia, Illinois, and Wisconsin offer transferable credits.
