| CAST & CREW ENTERTAINMENT SERVICES |
WEDNESDAY, JANUARY 18, 2017
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In this Issue
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PROPOSED LEGISLATION
Still in the House or Senate
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Indiana (H 1219)
House Bill 1219 proposes to reestablish the film production incentive program in Indiana. Features of the bill are outlined below.
- Provides for a refundable tax credit of not more than:
- 30% of wages, salaries, and benefits paid to qualified Indiana residents, excluding directors, producers, and screenwriters;
- 35% of payments for training and internships offered to Indiana residents; and,
- 20% of all other qualified production expenditures;
- Imposes a $15 million state funding cap for each fiscal year (July 1-June 30) with no per project maximum;
- Authorizes an increase to the annual funding cap to $20 million if the maximum amount of credits are utilized in each fiscal year from 2017 to 2019;
- Specifically excludes nonresident labor payments, cell phones, and costs of marketing and advertising, among other expenses, from the definition of qualified production expenditure;
- Allows the state to determine the applicable credit rate on a project-by-project basis and approve applications based on a project's economic viability and impact;
- Requires a qualified production to spend at least 50% of its total budget on qualified production expenditures;
- Establishes a minimum qualified spend requirement of $35,000;
- Allows the state to recapture any credits if the taxpayer is non-compliant with the terms of the program; and,
- Establishes a sunset date of December 31, 2023.
If enacted, the program would go into effect January 1, 2018.
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Indiana (S 7)
Senate Bill 7 proposes to reinstate the film production incentive program in Indiana. Highlights of the program are as follows:
- For productions with qualified spend of less than $6 million the program provides a refundable tax credit equal to:
- 40% of qualified production expenditures paid to an individual or entity located in a municipality or county in which either:
- 25% of the households are below the poverty level as established by the most recent United States decennial census; or,
- Has an unemployment rate which is 1.5 times greater than the statewide average over the most recent 18 month period for which data is available;
- 35% of qualified production expenditures incurred in areas not described above;
- For productions with qualified spend of $6 million or more the program provides for a refundable tax credit of not more than 15% on qualified expenditures, based on the project's economic viability and impact;
- Allows above-the-line and below-the-line resident labor as qualifying expenditures;
- Allows below-the-line nonresident labor as qualifying expenditures when taxes are assessed or imposed by the state;
- Creates a $2.5 million state funding cap for each fiscal year (July 1-June 30) without a per project cap;
- Requires a minimum spend of $50,000 in qualified expenditures;
- Requires any corporation or nonresident person to file Indiana income tax returns for at least the first 5 years that they have income from the production for which the tax credit is granted;
- Allows the state to recapture any credits if the taxpayer is non-compliant with the terms of the program; and,
- Establishes a sunset date of December 31, 2020.
If enacted, the program would go into effect January 1, 2018.
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KENTUCKY (H 124)
House Bill 124
proposes to amend the film production incentive program by expanding the definition of an enhanced incentive county to include all Kentucky counties within the Appalachian region.
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NEW YORK (S 430)
Senate Bill 430 proposes that the annual cap, currently $420 million per calendar year, be adjusted annually for inflation beginning after 2017. If approved, the amendment would take effect immediately.
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OKLAHOMA (S 41)
Senate Bill 41 proposes to advance the sunset date of the Oklahoma film incentive program from December 31, 2023 to December 31, 2017. If enacted, the amendment would go into effect November 1, 2017.
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TEXAS (H 779)
House Bill 779 proposes to abolish the Music, Film, Television, and Multimedia Office and the Moving Image Industry Incentive Program in Texas, among other incentives currently available for media production. Specifically, the bill would amend the current incentive program as follows:
- Abolishes the film office and calls for all unobligated and unexpended appropriations to lapse;
- Repeals statutes which created and regulated the film office, film incentive program, and media production development zones;
- Repeals a sales tax exemption currently allowed for purchases related to media production facilities;
- Repeals provisions related to funds to be used for film office activities; and,
- Repeals the Texas Music Foundation Account.
If enacted, House Bill 779 would take effect September 1, 2017.
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VIRGINIA (S 982 & H 1665)
Senate Bill 982 and House Bill 1665 recommend extending the sunset date of the Virginia motion picture production tax credit program from December 31, 2018 to December 31, 2021.
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CALIFORNIA
The California Film and TV Tax Credit Program 2.0's application window for Relocating TV Series and TV Projects (Non-Transferable Tax Credits) is February 10 - February 17, 2017.
Applications are ranked within categories based upon their "jobs ratio" score. Projects that rank in the top 200% will be notified by February 21, 2017 to submit Phase II documents within three days of such notification. Credit Allocation Letters will be issued on March 20, 2017.
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Production Incentives
Joe Bessacini
Vice President, Film & TV Production Incentives
818-480-4427
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Deirdre Owens
Vice President, Production Incentive Financing
818-972-3201
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