Cast & Crew's The Incentive Program (TIP) Jan. 17 Update

CAST & CREW

JANUARY 17, 2019

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

IN THIS ISSUE

PROPOSED

Indiana (H 1070)

Indiana (S 152)

New York (A 556)

New York (A 1101) and (S 1142)

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STATE OF THE MONTH

The Garden State's long-anticipated film incentive program returns by offering a tax credit of up to 37 percent. View Cast & Crew's State of the Month on New Jersey to learn more!

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PROPOSED LEGISLATION

Still in House or Senate

Indiana (H 1070)

House Bill 1070 proposes to establish the Indiana Film and Media Production Rebate program. Details of the program are as follows:

Allows productions that propose to incur qualifying production expenditures of at least $500,000 during preproduction, production, and postproduction to earn a rebate of not more than:
- 35% for expenditures related to skilled workforce training of Indiana residents and student interns from a state educational institution;
- 30% for wages, salaries, and benefits paid to Indiana residents;
- 20% for all other qualified production expenditures; and,
- Nonresident labor does not qualify;
Requires principal photography of a feature length film or episodic series to begin no later than 120 days after the applicant receives the letter of intent for financing-no later than 45 days if the project is a commercial;
Requires a payment of the IEDC's final administrative review fee equal to $1,000 for a feature length film ($500 for all other qualified projects) within 10 days of entering into an agreement with the state; and,
Allows the rebate to be assigned to a third party provided that the IEDC is notified no later than 10 days after the assignment is made.

If enacted, the program will be retroactive to January 1, 2019 and will have a sunset date of December 31, 2025.

Indiana (S 152)

Senate Bill 152 proposes to reestablish the Media Production Expenditure Tax Credit Program. Details of the program are as follows:

Allows qualified productions to earn a refundable tax credit equal to 35% of resident labor and other qualified expenditures for productions incurring less than $6 million in qualified production expenditures in a taxable year;
Allows a qualified production to earn a refundable tax credit equal to 40% on payments for labor or to entities located within specified municipalities or counties;
Limits the tax credit for productions incurring $6 million or more in qualified production expenditures to a rate of not more than 15%; and,
Establishes an annual funding cap of $2.5 million per fiscal year (7/1-6/30).

If enacted, this Act shall take effect January 1, 2020 and shall be applicable to all film production activity until December 31, 2022.

Together with Media Guarantors, CCFS now offers full completion bond services and counsel. B ringing unmatched experience, flexibility, security and responsiveness to filmmakers and productions.

New York (A 556)

Assembly Bill 556 proposes to amend the Empire State film production credit to allow television writers' and directors' fees as eligible costs, subject to the following provisions:

Limits fees to:
- $50,000 per episode for each writer and director who receives an on-air screen credit; and,
- $75,000 per series of episodes for each writer and director not receiving on-air credit;
Requires such writers and directors to be the following:

A member of a minority group or a woman; and,
A resident of New York State; and,

Provides for an annual funding cap of $5 million per tax year.

New York (A 1101) and (S 1142)

Assembly Bill 1011 and Senate Bill 1142 propose to amend the Empire State Film Production Credit by adding Rockland County to the list of counties that qualify for an additional 10 percent credit on qualified labor expenses.

If passed, this Act shall take effect immediately.

Oklahoma (S 133)

Senate Bill 133 proposes to terminate the Compete with Canada Film Act and the film incentive prematurely by changing the sunset date from July 1, 2024 to July 1, 2020.

If enacted, the Act shall be effective July 1, 2020.

Oklahoma (S 200)

Senate Bill 200 proposes to expand the purpose of the Oklahoma Quick Action Closing Fund (OQACF) and to amend the Oklahoma Film Enhancement Rebate Program as follows:

Allows for funds within the OQACF to be used for payments of rebates to high-impact productions pursuant to the Oklahoma Film Enhancement Rebate Program;
- Defines a "high-impact production" as a project with total production expenditures of $50 million or more with at least one-third of total costs deemed Oklahoma expenditures; and,
Increases the Oklahoma Film Enhancement Rebate Program's annual funding cap from $4 million to $10 million per fiscal year (7/1-6/30);

Excludes payments made to high-impact productions from the per fiscal year cap of $10 million-funds will instead be drawn from the OQACF.

If enacted, the Act shall be effective July 1, 2019.

Virginia (H 2163)

House Bill 2163 proposes to create the New Media and Technology Innovation Tax Credit Program. Details of the program are as follows:

Allows episodic television series, commercials, or digital interactive media productions to earn a transferable tax credit of 15% of qualifying expenditures, or 20% if the project is produced in an economically distressed area;
- Earn an additional 10% of wages and salaries paid to Virginia residents when total in-state expenditures are at least $250,000 but not more than $1 million, or 20% when total in-state expenditures exceed $1 million; and,
- Earn an additional 10% of wages and salaries paid to Virginia residents employed for the first time as actors or members of a production crew-potentially earning a combined credit of 35%-50%;
Limits the amount of qualified compensation and wages to the first $1 million for each resident and nonresident;
Requires an audit of qualifying expenditures by an independent certified public accountant;
Transferors of the tax credit will incur a transfer fee of 2% of the value of the qualifying expenses associated with the transferred credit or upon the distribution of a portion of the credits to a member, partner, shareholder, etc.; and,
The state may buy back the credit for no less than $0.80 of the dollar value of the tax credit.