South Carolina is considering legislation that would reinstate the 20% feature film incentive for out-of-state crew; currently out-of-state crew are capped at 10% of the first $35,000 in wages. Qualified television projects earn 20% for out-of-state crew up to $1M. Both qualified film and tv projects can earn 20% for all cast and local hires up to $1M, and 30% for SC goods and services
Attempts are now underway in the Michigan legislature to limit the amount available per year for production rebates. Currently there is no limit or cap, but last week an amendment bill which would put a $50 million per year cap on the rebate was passed by a Senate committee. The House is now out of session until after the election; legislation not approved by both the Senate and House by December 31 may not be carried over to 2009, so passage is unlikely this year. But it is probable that an amendment will be introduced again next year.
Meanwhile, the Michigan Treasury Department has ruled that mileage reimbursements, meal allowances and per diems will not qualify for the rebate unless they are subject to Michigan taxes.
Posted 3 August, 2008 in FilmUSA
Senators Dianne Feinstein (CA) and Gordon Smith (OR) recently introduced S. 3333, the “Domestic Film Production Equity Act of 2008.” The Act expands the provisions of Section 199, Deduction for Domestic Activities, by allowing a deduction for part-time and temporary services performed in the United States by actors, production personnel, directors, and producers. The proposed legislation also allows films distributed through the Internet or any other media to qualify, instead of only film and video tape.
Posted 3 August, 2008 in FilmUSA
NEW INCENTIVES GUIDE - from Jeff Begun at The Incentives Office
The Incentives Office Summer “Guide to U.S. Production Incentives” (by the authors of former Axium Guide) is now available, in both printed and electronic editions.
Summer Cover Published quarterly, the Guide provides information about what production tax credits or rebates are available in every U.S. state, requirements and conditions, and what needs to be done to claim the incentive.
For an electronic copy CLICK HERE: http://fs6.formsite.com/jeff5000/form842791879/, or go to our website http://www.theincentivesoffice.com .
Thanks to our advertisers, printed copies are now available at no charge, other than postage and handling. To order, please send $5 (cash or check) for one copy, $8 for two, or $10 for three copies, with an address label (if possible) or your mailing address, to: The Incentives Office, 1507 7th Street, #157, Santa Monica, CA 90401. Or to order via credit card, CLICK HERE: https://www.plimus.com/jsp/buynow.jsp?contractId=2004758
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The Incentives Office works with producers to maximize their production incentive and minimize the amount of time they need to spend to get it. We also work with lenders to vet the estimated rebate or credits.
If you would like the latest information about a particular state, or suggestions on qualified vendors and funding sources for the credit or rebate, please CLICK HERE: http://fs6.formsite.com/jeff5000/form859563902/ for our free information form.
___________
Any questions, feel free to call Jeff Begun, at 310 982-1340. Or email - jeff@theincentivesoffice.com
“You worry about making the movies - we’ll take care of the incentives.”
Posted 18 May, 2008 in FilmUSA
The top five film incentive packages in the U.S.
By MATTHEW ROSS, Daily Variety
For the past six years, Louisiana and New Mexico have reigned atop the
ever-expanding list of states that have opened their coffers to the movie
business. But they’re certainly not the only draws out there. Producers and
studios have more choices than ever before, and the trend shows absolutely
no sign of slowing down.
Over the past year, we’ve seen how a single new piece of legislation can
change the entire U.S. landscape in an instant, whether it’s coming from
states with established production services (New York) or a new upstart
whose financial package is simply too good to resist (Michigan).
Picking the best incentive packages in the U.S. is far from an exact
science, but we’ve given it a shot. Herewith, we present our top five. (Of
course, things could always change next week.)
LOUISIANA
The granddaddy of the incentive boom continues to impress and endure. When
Hurricane Katrina and its aftermath made shooting difficult in New Orleans,
production houses and crew members set up shop in other cities such as
Shreveport and Baton Rouge without missing a beat. And 2008 is shaping up to
be a record year — 28 productions have come through the state through
April, a pace that should easily eclipse 2007’s record of 53 productions for
the entire year. The reason: Along with its 25% transferable credit for all
in-state expenditures and an additional 10% on labor for state residents,
Louisiana continues to develop its production resources, which now include
the Cinelease soundstages in Shreveport and the Celtic Media Center in Baton
Rouge. Upcoming and recent pics include David Fincher’s “The Curious Case of
Benjamin Button,” with Brad Pitt, and Oliver Stone’s “W.” Louisiana
continues to be a favorite location for both the Weinstein Co. bring in
regular business.
NEW MEXICO
Like Louisiana, New Mexico boasts one of the most established, effective
incentive programs in the U.S. Rather than offer tax credits, the state
provides a flat-out cash rebate covering 25% of all in-state expenses. In
addition, it offers 0% loans (in exchange for backend participation) of up
to $15 million on shows spending at least $2 million within the state. In
previous years, the one knock on New Mexico was that it had scant facilities
and hardly any qualified local crew. That situation is being remedied. Last
June, Albuquerque Studios, a $75 million soundstage and production hub,
opened its doors. Recent and upcoming productions to take advantage of the
new facility include Taylor Hackford’s “Love Ranch,” Jim Sheridan’s
“Brothers” and McG’s “Terminator Salvation: The Future Begins,” currently in
prep.
CONNECTICUT
In only two years, Connecticut has gone from nonentity to major player in
the incentive game, and has offered further proof that film-related
legislation has the ability to give local economies an immediate boost.
Thanks to its generous 30% tax credit and its close proximity to the
resources and crew of neighboring New York, Connecticut has managed to lure
a slew of high-profile productions recently. Seven features are shooting
there, including Andrew Jarecki’s “All Good Things” with Ryan Gosling and
Kirsten Dunst, P.J. Hogan’s “Confessions of a Shopaholic” and Sam Mendes’
“Farlanders.”
NEW YORK
Until a few weeks ago, New York had one of the weaker incentive programs in
the nation. That still didn’t stop more than 250 features from shooting in
the state last year. Those stats are about to be shattered. In April, Gov.
David Paterson and the Legislature teamed up to pass a bill that tripled the
state tax credit on production expenses to 30%, with an additional 5% thrown
in for shows shot within New York City. For productions big and small, the
cringe-inducing costs of shooting in Gotham have suddenly become easier to
manage.
MICHIGAN
The new kid on the block, Michigan rounds out the list purely based on its
unmatched investment, which was announced last month. It includes a
phenomenal 40%-42% cash or tax-credit rebate (whichever the
producers/financiers prefer) on all in-state expenditures, plus a 30%
reimbursement for nonresident below-the-line crew members. Simply put, this
is the best package ever to be introduced in the United States. But that
doesn’t mean there won’t be significant hurdles to overcome, the most
glaring of which is Michigan’s utter lack of any significant production
resources or local crew. Expect that situation to change, and fast. Just
look at Louisiana and New Mexico.
Posted 20 March, 2008 in FilmUSA
U.S. Production Incentives Alert
March 20, 2008
Alaska’s new incentive legislation is under active consideration by the Alaska Senate, with final action expected soon. Dama Chasle of the Incentives Office has been testifying before the Alaska senate in support of SB230 by telephone at each session. This will provide a 30% credit for all salaries, a 30% credit for goods and services purchased from an Alaska vendor, and 40% for cast & crew who are Alaska residents.
Colorado’s hoped for incentives program was not approved when it came up for vote yesterday.
Illinois has not reinstated its new program, which expired on 12/31/07. Legislation was approved by the Illinois house, but did not pass the Senate in March. It will be reconsidered in mid-April.
Mississippi has increased its rebate for out-of-state crew from 10% to 20%, non-resident cast are capped at $1 million per hire, and projects are capped at $8 million. Loan-outs will be charged a flat 2%. (This has not yet been passed, but is in conference).
Michigan’s legislature is completing work on the 16 bills that comprise their new incentives package. Approval by the Senate is expected today (Thursday,) with the Governor expected to sign on Monday or Tuesday. The legislation provides for a 40% rebate for all ATL plus Michigan labor; out-of-state crew is 30%. There is a $2 million cap per hire. Goods and services purchased from local vendors get a 30% rebate. Applications, which must be approved prior to the start of production, should be available late next week. (Goods and services are 40%, not 30%).
Rhode Island is considering a bill that will put a $15 million yearly cap on production (there is currently no cap). If passed, the legislation will be retroactive, and apply to any films starting after January 1, 2008, including films already in production.
THE INCENTIVES OFFICE
Please feel free to call us with any question about U.S. Production Incentives. We can: suggest the best places to shoot, prepare and file the required applications, make suggestions to maximize your incentives, ensure that vendors for production insurance, payroll, completion bonds and similar are invoicing properly to capture the credits or rebates, introduce you to tax credit brokers and incentives funding sources, introduce you to 3rd party auditors (if required), and help with just about anything you need relating to incentives.
Jeff Begun — jeff@theincentivesoffice.com
Posted 18 February, 2008 in FilmUSA
ALASKA — The new incentives bill SB230 has been submitted to the legislature. The current version provides for a 30% tax credit for all labor (cast and crew) and local purchases, plus 10% more for local labor, with a 2% uplift for rural and 2% uplift for off-season filming. This will be a transferable credit; transferable to Alaskan tax-paying corporations.
ARIZONA - The $50 million fund available for 2008 has been fully allocated. However, backup applications are still being accepted and processed. . Music Videos and Commercials now qualify for the incentive; 5% of the yearly tax credit cap is reserved for this use. There is also a new 15% infrastructure credit available.
CONNECTICUT — There is still no film commissioner in this state. Brokers are reporting problems with placing the film credits, although recent changes in the law, which expands the base of eligible buyers, should help. Meanwhile, the DOR has taken the position that any Connecticut application filed before July 1, 2007, regardless of when the actual certificate will be issued, will be subject to recapture
ILLINOIS — The state did not renew its incentive program, which expired on 12/31/2007. The new bill to extend the program through 1/1/2009 has passed the House and is in the Senate. The Film Commissioner hopes that the new program will be in place as soon as the state’s budget issues are resolved.
INDIANA — The proposed bill provides for a refundable tax credit of 15% for expenditures less than $6 million. For qualified productions with expenses in excess of $6 million the credit percentage is discretionary but not more than 15%.
MARYLAND — Approximately $3 million is now available in this year’s program, as a large film was pushed back. Please contact Jack Gerbes, the Film Commissioner, for further details.
MICHIGAN — New legislation is being prepared that will offer a 40% cash rebate, plus an additional 2% for shooting in certain cities; no caps, except a $2 million max per employee. The minimum spend is $50,000. Also being considered are a tax credit for Michigan residents who invest in films, a low-interest production loan, and a workforce development initiative. Out-of-state residents will qualify. The Governor is very much behind this legislation; more details will follow shortly.
MISSISSIPPI — Ward Emling, the Film Commissioner, and Dama Chasle are working on a proposal for increased incentives.
NEW JERSEY — The increase to $30 million per year, which was approved last year but not signed by the governor, has again been presented to a legislative committee. Currently the wait in the queue for New Jersey tax credits is nearly 2 years. Governor Corzine signed the amended version of S2526 which approved an additional $5 million set-aside for digital media.
NEW MEXICO — The language in the proposed bill requires the performing artist’s entity to deduct and remit income taxes in order for payments to the entity to qualify for the tax credit.
SOUTH CAROLINA - The proposed bill increases the annual state fund for the 20% payroll rebate from $10 million to $15 million and allows the unused funds for both the payroll rebate and expenditure rebate to be carried forward.
VIRGINIA - Under the new proposal, it may be possible to get a refundable tax credit of 15% on expenditures and up to 30% of the total VA resident payroll. There is a $7.5 million cap per picture.
WISCONSIN — Effective January 1, 2008, Wisconsin offers a 25% refundable tax credit for qualified spend (not including payroll). There is also a 25% nonrefundable tax credit on the first $25,000 of resident wages, excluding the two highest paid employees. Scott Robbe, the Film Commissioner, expects a number of productions to start shortly.
COLORADO, IDAHO, and WEST VIRGINIA are working on major changes to their programs.
UTAH, FLORIDA, NEW JERSEY and MISSOURI are out of funds for the current fiscal year, but interested producers should contact the Film Commissioners, as funds sometimes become available.
Posted 27 January, 2008 in FilmUSA
Please note that Illinois has an incentive bill which they are hoping will pass soon. Florida is technically out of money until 7/1/08, but if anyone in line drops out, monies will be available before 7/1/08.
January U.S. Production Incentives Update
______________________________________________________
ALASKA – the new incentives bill has been drafted, and will be presented to the legislature soon. This will be one of the most generous incentives available, including a transferable tax credit of 30%, with an additional 10% for local hires. Quick action is anticipated. (Dama Chasle and Jeff Begun helped create this legislation, which is sponsored by Senator Ellis).
ARIZONA – applications for the current fiscal year are still being accepted. On February they will begin accepting applications for commercials and music videos.
ILLINOIS – the state did not renew its incentive program, which has consequently expired. The film commissioner hopes that a new program will be in place by the end of the month.
INDIANA – a new incentives program has been passed; details to follow.
NEW JERSEY – The increase to $30 million per year, which was approved last year but not signed by the governor, has again been presented to a legislative committee.
NEW MEXICO has clarified part of its program — per diem payments to both residents and nonresidents qualify when paid for services performed in New Mexico. Per diem payments to residents when providing services out of state do not qualify (although wages paid to residents while working out of state sometimes do qualify).
PENNSYLVANIA – applications are still being accepted for this fiscal year.
COLORADO, IDAHO, MICHIGAN, VIRGINIA and WEST VIRGINIA are working on major changes to their programs.
UTAH, FLORIDA, MARYLAND and MISSOURI are out of funds for the current fiscal year, but interested producers should contact the film commissioners, as funds sometimes become available. ______________________________________________________
Posted 27 January, 2008 in FilmUSA
Observer at Large
“2007 in Review: Incentives, Global Content, Portable Viewing”
By Kathleen Milnes
I’m a data junkie. I spend a lot of my time with facts - facts about dollars
spent, people employed, students educated, places impacted. So for my year
in review, I’m sticking to the facts about public policy, technology’s
impacts and workforce development in the entertainment industries (well.
with just a smidge of analysis).
I’ve identified four major trends in 2007: 1) the expanding and often
enhanced pool of production incentives; 2) the global nature of content
creation; 3) the explosion of new outlets for content; and 4) efforts to
retain, grow, or often steal an artistically and technologically savvy
workforce. I’m covering three in this column and write about workforce
issues in the next issue.
Incentives
Continuing an accelerating trend, new incentives were enacted or existing
ones were enhanced across the U.S. and the globe. There are only five states
that have no incentives - California being one of them. New production
incentives were passed in legislatures in Texas, Michigan, Wyoming and
Wisconsin, to name a few. Massachusetts, Pennsylvania, Mississippi and
Florida sweetened their offers to keep up. Washington State is a good
example of new programs to grow local production by providing direct grants
in addition to production tax incentives.
Why? Because they work! The granddaddy of this trend in the U.S. is the
state of Louisiana, which now ranks third in the number of films produced.
A recent study showed that employment in Louisiana’s film industry has grown
23 percent per year since 2001, the highest growth rate in the nation. The
Louisiana industry supported 5,437 jobs in 2003. By 2005, an additional
13,445 jobs were created. Wages have increased more than 31 percent each
year. In 2003, film spending added $7.4 million to the state economy in the
form of wages, profits, sales taxes, etc. In 2007, this rose to nearly $342
million.
In New Mexico, the financial impact of film production in the state has
risen from $44.4 million in 2003 to an estimated $479.7 million for 2007.
The number of days film employees work rose from 28,120 in 2003 to 173,376.
And the number of IATSE members of has risen from 70 a few years ago to
1,300. Sound stages have sprouted in Albuquerque and Sony Pictures
Imageworks has announced plans to expand there as well.
This scene is being played out across the world as the demand for content
grows and the competition between countries, regions and states becomes more
intense. And in all of these locations, the development of sound stages,
equipment rental facilities and postproduction houses grows in direct
response.
Global Content Creation
Since film was invented, countries around the world have created their own
films primarily for their own audiences. In many countries, filmmaking is
supported by public dollars because it is viewed as a cultural product.
Over the last year, partnerships between U.S. studios and production
companies have sprung up in China and India. A few examples: Warner China,
the first Chinese-American film company, established in 2004, is now
distributing original film content produced specifically for a Chinese
audience via mobile phones. Sony Pictures Entertainment has created or
invested in over 40 international networks in more than 130 countries
reaching more than 300 million viewers worldwide, including specialized
channels showing Japanese animation. In 2007, this initiative, called
ANIMAX, expanded into Central Europe and is now broadcast in Hungary,
Romania, the Czech Republic and Slovakia. ANIMAX Germany launched in June
2007.
New Outlets for Content
According to my latest count, there are at least 50 original series
broadcasting webisodes on the Internet. More than 85 percent of U.S.
households are connected to the Internet via broadband, according to
Nielsen, while more than 30 percent of web users view live streaming video
(such as webisodes or streaming episodes of television series) and 20
percent watch saved video files (i.e., content downloaded from iTunes or
other consumer sites). And these numbers will only increase as technology
continues to evolve.
In June 2007, Nielsen released a progress report on its efforts to capture
the audience for all of these platforms called A2/M2 for Anytime Anywhere
Media Measurement. While audience numbers for these new platforms are not
yet available, there is some interesting research to date. For example, 19
percent of households have at least one personal video device. The largest
penetration is for portable DVD players (10 percent of households) and video
enabled cell phones (5 percent of households). However, playing video on a
personal device has not yet become an ingrained habit. Even among PVD
owners, about two-thirds responded that it had been more than a week since
they watched something on their portable player. Only four percent of
households own a video-enabled iPod or MP3 player.
Workforce Development
In the next issue I’ll update you on trends in workforce development around
the globe. Governments, schools and industry are teaming up to expand the
pool of talent to feed our ever-growing media-centric world. Taking a page
from Nielsen, maybe we should call this A3 entertainment - anytime,
anywhere, on any device. But the issue for you, dear reader, is who makes
it, and where?
Posted 2 December, 2007 in FilmUSA
http://www.taxcreditsllc.com/Imagine%20AFM%20TCLLC-IFF.pdf
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