Arizona is the latest state to have film incentives after Gov. Janet Napolitano signed a bill Sept. 30 giving tax credits to the film industry, specifically to companies that film and hire in Arizona.

(The Hollywood Reporter) -- Arizona is the latest state to have film incentives after Gov. Janet Napolitano signed a bill Sept. 30 giving tax credits to the film industry, specifically to companies that film and hire in Arizona.

The income tax credits are capped at $5 million per production and are based on a sliding scale depending on the amount spent in the state. A production spending more than $3 million can be eligible for a 20% credit, $1 million-$3 million can get a 15% credit, while $250,000 can receive a 10% credit.

To qualify, a film must incur production costs of a minimum of $250,000 in a 12-month period and also must hire a percentage of its crew in-state. In 2006, at least 25% of a production's full-time employees must be from Arizona, rising to 35% in 2007 and 50% in 2008.

One of the aims of the bill, which goes to effect Jan. 1, is to build up the state's crew base. Productions also can qualify for a complete state sales tax exemption.

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