Zim
Veteran
This might be a way to help pay for a camera and a production. Is anyone tried taking this tax credit yet. Any accountants out there?
From a story a read:
There is groundbreaking news on the runaway production front, as both houses of Congress recently passed The American Jobs Creation Act, which includes a provision offering production tax-incentives with the goal of reducing the flight of film and television productions from the U.S. The outcome is a welcome one for the DGA, as stemming the tide of runaway production has been our primary legislative priority for the past five years.
"The DGA took a leadership role on behalf of the entire industry — and we are now seeing the fruits of our labor," said DGA board member and PAC Chair, Taylor Hackford. "For more than five years, the DGA and the Leadership Council have been working tirelessly to capture the attention of lawmakers in Washington. We have had face-to-face meetings with more than 29 key members of Congress to discuss runaway production and many other issues facing directors and their teams. We are tremendously proud of the inroads we have made and we are deeply grateful to the bipartisan group of politicians who stood at the forefront of this issue and fought by our side throughout the process to achieve this success."
Background:
In recent years, we've seen a growing number of countries that are enacting incentive programs to attract U.S. film and television productions as a means of creating local jobs. These incentive programs are designed to lower the cost of producing a film or television production in that country. Canada accomplishes this through a tax credit that is paid to producers based on the cost of hiring Canadian workers. The UK, Germany and other countries accomplish this by permitting the immediate write-off of film production costs — which attracts investors tempted by the tax savings that can be realized through large deductions. Through either approach, it is possible to reduce the costs of production by approximately 7% to 15%.
Under the new American Jobs Creation Act, many of the productions most likely to "runaway" to other countries would be eligible for a tax-incentive program with a similar approach of that used in the UK and Germany. Under this new program, the cost of production of qualifying films would be permitted to be immediately expensed — that is, fully deducted from income for tax purposes — in the year the expenditures occur. This would be in contrast to current law, where the cost of producing the film is usually recovered over a period of several years. This ability to immediately deduct costs from income would serve as a means of attracting investment capital into production where a portion of the tax benefits will flow through to reduce the cost of the production.
Bottom*Line:
The American Jobs Creation Act is the first time that runaway production has been acknowledged as a major problem on the federal level and, as a result, there is a growing sense of optimism that things may change — but there is still hard work ahead. As President Michael Apted said, "It is the DGA's hope that this ground-breaking federal tax-incentive legislation, in combination with a growing number of state and local incentives, will stem the tide of film and television productions, and the jobs they create, from going abroad. Although this legislation is an important step forward, our efforts to keep entertainment industry jobs here in the U.S. are far from done."
top of page
If signed by the president, as expected, The American Jobs Creation Act would help discourage runaway production in the following manner:
* The cost of qualifying film and television productions would be permitted to be immediately written-off for tax purposes in the year the expenditure occurs in lieu of using the income forecast method for amortizing the costs of films.
* The proposal applies only to qualifying film or television productions the aggregate cost of which does not exceed $15 million.
* A higher expenditure cap of $20 million would apply to productions located in areas eligible for designation as a low-income community or eligible for designation by the Delta Regional Authority as a distressed county or isolated area of distress.
* Qualified film and television productions would be limited to any production of a motion picture (whether released theatrically or directly to video cassette or any other format); miniseries; scripted, dramatic television episode; or movie of the week. Only the first 44 episodes, including the pilot production, of a scripted dramatic series would be eligible under this Act.
* To qualify, at least 75 percent of the compensation expended on the production must be for services performed in the United States.
* Qualified films would not include sexually explicit productions as defined in section 2257 of title 18 of the U.S. Code.
These provisions would be in effect for qualifying productions started after the date of enactment and sunsets for qualifying productions commencing after December 31, 2008. The Commerce Department would be directed to report by December 31, 2006
From a story a read:
There is groundbreaking news on the runaway production front, as both houses of Congress recently passed The American Jobs Creation Act, which includes a provision offering production tax-incentives with the goal of reducing the flight of film and television productions from the U.S. The outcome is a welcome one for the DGA, as stemming the tide of runaway production has been our primary legislative priority for the past five years.
"The DGA took a leadership role on behalf of the entire industry — and we are now seeing the fruits of our labor," said DGA board member and PAC Chair, Taylor Hackford. "For more than five years, the DGA and the Leadership Council have been working tirelessly to capture the attention of lawmakers in Washington. We have had face-to-face meetings with more than 29 key members of Congress to discuss runaway production and many other issues facing directors and their teams. We are tremendously proud of the inroads we have made and we are deeply grateful to the bipartisan group of politicians who stood at the forefront of this issue and fought by our side throughout the process to achieve this success."
Background:
In recent years, we've seen a growing number of countries that are enacting incentive programs to attract U.S. film and television productions as a means of creating local jobs. These incentive programs are designed to lower the cost of producing a film or television production in that country. Canada accomplishes this through a tax credit that is paid to producers based on the cost of hiring Canadian workers. The UK, Germany and other countries accomplish this by permitting the immediate write-off of film production costs — which attracts investors tempted by the tax savings that can be realized through large deductions. Through either approach, it is possible to reduce the costs of production by approximately 7% to 15%.
Under the new American Jobs Creation Act, many of the productions most likely to "runaway" to other countries would be eligible for a tax-incentive program with a similar approach of that used in the UK and Germany. Under this new program, the cost of production of qualifying films would be permitted to be immediately expensed — that is, fully deducted from income for tax purposes — in the year the expenditures occur. This would be in contrast to current law, where the cost of producing the film is usually recovered over a period of several years. This ability to immediately deduct costs from income would serve as a means of attracting investment capital into production where a portion of the tax benefits will flow through to reduce the cost of the production.
Bottom*Line:
The American Jobs Creation Act is the first time that runaway production has been acknowledged as a major problem on the federal level and, as a result, there is a growing sense of optimism that things may change — but there is still hard work ahead. As President Michael Apted said, "It is the DGA's hope that this ground-breaking federal tax-incentive legislation, in combination with a growing number of state and local incentives, will stem the tide of film and television productions, and the jobs they create, from going abroad. Although this legislation is an important step forward, our efforts to keep entertainment industry jobs here in the U.S. are far from done."
top of page
If signed by the president, as expected, The American Jobs Creation Act would help discourage runaway production in the following manner:
* The cost of qualifying film and television productions would be permitted to be immediately written-off for tax purposes in the year the expenditure occurs in lieu of using the income forecast method for amortizing the costs of films.
* The proposal applies only to qualifying film or television productions the aggregate cost of which does not exceed $15 million.
* A higher expenditure cap of $20 million would apply to productions located in areas eligible for designation as a low-income community or eligible for designation by the Delta Regional Authority as a distressed county or isolated area of distress.
* Qualified film and television productions would be limited to any production of a motion picture (whether released theatrically or directly to video cassette or any other format); miniseries; scripted, dramatic television episode; or movie of the week. Only the first 44 episodes, including the pilot production, of a scripted dramatic series would be eligible under this Act.
* To qualify, at least 75 percent of the compensation expended on the production must be for services performed in the United States.
* Qualified films would not include sexually explicit productions as defined in section 2257 of title 18 of the U.S. Code.
These provisions would be in effect for qualifying productions started after the date of enactment and sunsets for qualifying productions commencing after December 31, 2008. The Commerce Department would be directed to report by December 31, 2006
