Cast & Crew's The Incentive Program (TIP) April 2, 2018 Update

CAST & CREW ENTERTAINMENT SERVICES

MONDAY, APRIL 2, 2018

Cast & Crew Financial Services offers both U.S. and Canadian production incentive management services from setup to audit, as well as production incentive financing.

IN THIS ISSUE

PROPOSED

California (S 951) (Amended)

District of Columbia (B 218)

Hawaii (H 1328) (Senate Draft 1)

Minnesota (H 4107)

Minnesota (H 4108)

Nebraska (L 945)

New Jersey (S 122) (Amended)

New York (S 8032)

IN THE NEWS

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PROPOSED LEGISLATION

Still in the House or Senate

California (S 951 ) (Amended)

Senate Bill 951 proposes to amend the California film and television incentives program as follows:

Increases the incentive on non-indie productions for out-of-zone wages from 5% to 10% for services performed by individuals that reside in CA but outside the zone;
Allocates 8% of the annual program funds for projects produced by independent production companies, previously 5%, as follows:
- 4.8% for independent films with qualified expenditures totaling $10 million or less;
- 3.2% for independent films with qualified expenditures in excess of $10 million;
Reduces the annual allocation for relocating television series to 17%, previously 20%; and,
Extends the sunset date from June 30, 2020 to June 30, 2025.

If approved, the Act will go into effect immediately.

District of Columbia (B 218)

On February 7, 2018, DC B 218 became law without the Mayor's signature. The bill allows for a 10% tax credit to be earned on eligible production costs for a qualified film, provided, at least 75% of the total stage work occurs at a qualified film, television, and digital media production facility. However, as of today, there are not any qualified production facilities in the High Unemployment Wards or Areas in D.C. available to support stage work for a qualified film.

The bill also creates tax abatements and incentives for the construction of a building or complex of buildings and their improvements used regularly for the production of film, television, and digital media content in High Unemployment Wards or Areas in D.C.

Hawaii (H 1328) (Senate Draft 1)

House Bill 1328 proposes to amend the Motion Picture, Digital Media, and Film Production Income Tax Credit as follows:

Increases the annual funding cap to $55 million, previously $35 million;
Reduces the per project incentive cap from $15 million to $12.5 million; and,
Allows a qualified production to provide alternative marketing opportunities instead of a shared-card, end-title credit provided they offer equal or greater promotional value to the State than the shared-card, end-title screen credit.

Minnesota (H 4107 )

House Bill 4107 proposes to appropriate an unspecified amount to the Minnesota Film and Television Board's Snowbate [film incentive] program for fiscal year 2019.

Minnesota (H 4108 )

House Bill 4108 proposes to create a refundable and assignable film production tax credit equal to 25% of direct film production and postproduction expenditures made in Minnesota.

If passed, the Act shall go into effect for taxable years beginning after December 31, 2018.

Nebraska (L 945 )

Legislative Bill 945 proposes to create the Nebraska Film Office Fund and may consist of funds from legislative appropriations, gifts, grants, and bequests, given that such deposits are made

The Act will take effect when passed and approved according to law.

New Jersey (S 122 ) (Amended)

On March 13, 2018, the Senate amended Bill 122 which establishes a tax credit program for qualified expenses incurred during the production of certain film and digital media content beginning on or after July 1, 2018. The details of the program are as follows:

Allows for a transferable tax credit equal to 30% (35% in the following municipalities: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem County) of qualified production expenses provided the production company meets the following requirements:
- Incurs at least 60% of total film production expenses (exclusive of postproduction costs) in-state or incurs more than $1 million in qualified production expenses;
- Commences principal photography within 180 days from the original application date or 150 days from the date of approval of the application; and,
- Withholds 6.37% from each payment to a loan out company or independent contractor;
Excludes payments in excess of $500,000 made to an individual for costs for a story, script, or scenario used in the production of a film and wages or salaries or other compensation for writers, directors, including music directors, producers, and performers; and,
Establishes an annual funding cap of $75 million per fiscal year (July 1 - June 30) thru June 30, 2023.

Digital media projects earn 20% - 25% and have different requirements.

New York (S 8032 )

Senate Bill 8032 proposes to amend the Empire State Film Production incentives program by allowing a credit on television writers' and directors' fees and salaries as follows:

Allows for a tax credit equal to 30% of costs for writers' and directors' fees and salaries on a qualified project, excluding fees or salaries paid to any writer or director who is a profit participant;
Requires that each writer or director be a woman or a minority group member, as defined;
Applies to a limited amount of salaries or fees paid to a writer or director who receives either an on-air credit or non-credit; and,
Limits the aggregate amount of credits allowed for writers and directors to $5 million per calendar year.

If passed, the Act will take effect immediately and shall apply to taxable years beginning on or after January 1, 2019.