What “grinds” the tax credits? What does this mean?

When a financing source “grinds” the tax credits, it means that it is deducted from the total cost of production when calculating the BC labour cap. The following is a non-exhaustive list of ineligible costs that grind the BC tax credits:

  • Website costs
  • Promotional / marketing costs incurred after the production is complete
  • 50% of craft services
  • Tax credit application fees
  • Crowdsourcing
  • Grants
  • Deferrals
  • Non-recoupable advances
  • Other provincial tax credits (not federal tax credits)
  • Non-bona fide loans (please refer to CRA’s application policy on this issue and additional types of assistance)

Note that bona fide loans, equity financing and CAVCO (federal) tax credits do not grind the BC tax credits.