Digital Media Credit
For detailed information about eligibility for this and other tax programs, please contact the N.C. Department of Revenue Corporate Tax Division at 919-733-8510.
Your video game or digital media company will Thrive in North Carolina®. The state, already home to a growing cluster of this industry, offers many incentives to help you build a competitive advantage for your company, including financial incentives.
North Carolina taxpayers that develop Interactive Digital Media (IDM) within the state are allowed a tax credit.
Credits are awarded for taxpayer's expenses that exceed $50,000 that are paid during the taxable year in development phases, and may not exceed $7.5 million.** The percentage that applies to the expenses is:
- 15 percent of compensation and wages for a full-time employee. fringe contributions on compensation and wages, and other allowable expenses.
- 20 percent of research expenses paid to North Carolina university or participating community colleges.
Helpful Resources | Interactive Digital Media Tax Credit
Restrictions
Products for the following activities are ineligible for the IDM tax credit:
- Developed by the taxpayer for internal use.
- Interpersonal communications service, such as video conferencing, wireless telecommunications, a text-based channel, or a chat room.
- Internet site that is primarily static and primarily designed to provide information about one or more persons, businesses, companies, or firms.
- Gambling or casino game.
- Political advertising.
- Contains material that is obscene or that is harmful to minors – Please refer to North Carolina General Statutes N.C. §14-190.1 and 14-190.13.
Definition:
IDM products are defined by those used for electronic media distribution, including file download over the Internet; contains a computer-controlled virtual universe with which an individual who uses the program may interact in order to achieve a goal; and/or contains a significant amount of at least three of the following five types of data: animated images, fixed images, sound, text, and 3D geometry. This includes game platforms, game engines, and games that have both entertainment and serious applications - Please refer to North Carolina General Statutes N.C. §105-129.56.
** Please also note that expenses used to claim this credit may not be used to double claimed toward another North Carolina incentive program. Tax program is effective on or after January 1, 2011.
