If you work in New Media, build apps, program, create tools for clients, then you should be paying attention to the changes in the Interactive Digital Media Tax Credit that were announced with the recent Provincial Manitoba 2013 Budget. Our friends over at New Media Manitoba have a great breakdown that you should go read.
As this tax credit pertains to Visual Lizard and our services (listen up clients!) here are the key changes:
- The tax credit is equal to 40% of qualifying labour costs related to the production of eligible interactive digital media projects. The maximum tax credit for a project is $500,000.
- The Interactive Digital Media Tax Credit, which was set to expire December 31, 2013, is extended to December 31, 2016.
- An eligible product that is developed under contract for an arm’s-length purchaser does not need to demonstrate the product will be resold or licensed by that arm’s-length purchaser
Points 1 and 2 are terrific in that they allow us a little more flexibility with our internal projects, some client projects, and we now have another 3 years to possibly receive help when needed. That is awesome.
Point 3 is the cherry on top for us. More often than not, when our clients come to us, they are looking for our expertise in helping them build tools that their staff and clients or customers can use. These tools range from simple web tools all the way up to online logistics systems. In MOST of the projects we have produced over the years, there has never been any intention to resell the work/project once it is completed. Therefore our clients were never eligible for the Interactive Digital Media Tax Credit under the old terms.
With the new wording it means that MOST of our projects would now have a chance to qualify for the credit. There is the possibility of recouping 40% of the cost of the project in credits up to $500,000.
Visual Lizard has already put some calls out to get some further clarification on the new wording. Rest assured though, this is all positive stuff for our industry. Regardless of how the tax credit plays out over the next 3 years, we will still be here, building great things with great people. But keep this in mind when we talk. We might be able to think even bigger than we already do!