Certain California legislators hope to expand upon the film and TV tax credit program in our state. Lawmakers introduced a bill that was intended to address problems associated with the current incentive program that was introduced in 2009. There is also hope that improvements to the credit program will provide Hollywood businesses a competitive edge over other locations in the world.
Film and TV producers are already entitled for a 20 to 25 percent credit concerning specific production expenses. The incentive has mainly been used towards lower-budget proposals. Industry officials would like to see annual funding of $100 million towards TV and film productions increased to $420 million.
Currently the tax credit program is limited to smaller budget films and this proposal would allow for large-budget films to qualify as well. This bill would also allow a 5 percent credit for productions made outside of Los Angeles.
Executives and union officials in the entertainment industry understandably are supportive of such measures. They point out that when production and jobs go elsewhere, so too does tax revenues. “We simply can’t sit by and watch this $17 billion a year sector of our economy continue to leave California,” said one assemblyman.
Experienced tax attorneys can help individuals and businesses out concerning tax planning. We will have to wait to find out whether this proposal actually makes it through the Senate or will be supported by the governor. The area of taxation is constantly evolving and it is sometimes difficult for businesses to know as to which tax credits they are or are not qualified for.
Source: Los Angeles Times, “Bill to expand California’s film tax credit is introduced in Assembly,” Richard Verrier, Feb. 19, 2014