| CAST & CREW ENTERTAINMENT SERVICES |
WEDNESDAY, MAY 3, 2017
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Cast & Crew Financial Services
offers both U.S. and Canadian production incentive management services from setup to audit, as well as production incentive financing.
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In this Issue
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Georgia (H 199)
into law. The law amends the film incentive program by establishing a postproduction credit. Features of the new incentive are as follows:
- Creates a variable transferable tax credit, based in part on meeting certain minimum spend requirements, equal to 20% - 35% of qualified expenditures incurred in state for footage shot inside or outside this state;
- Creates an annual funding cap of $10 million per calendar year through December 31, 2022;
- Allows any unclaimed funds to roll over to the succeeding year;
- Allows for a per project cap of not more than 20% of the aggregate annual cap applicable to each year; and,
- Specifies that any postproduction expenditures claimed by a production company under the base investment credit or Georgia promotion uplift will not qualify for the postproduction only credit.
The new law applies to tax years beginning on or after January 1, 2018.
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Oklahoma (H 2344)
On April 26, 2017, Governor Mary Fallin signed
House Bill 2344. The bill reduces the annual funding cap for Oklahoma's incentive program from $5 million to $4 million per fiscal year (July 1-June 30), effective July 1, 2017.
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PROPOSED LEGISLATION
Still in the House or Senate
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Connecticut (S 1055)
Senate Bill 1055 proposes the following revisions to the film production tax credit program for income years beginning on or after January 1, 2018:
- Allows a taxpayer to apply the film production tax credit against the state sales and use tax; and,
- Requires that a fee of 6% of the total credit claimed be paid to the state if a taxpayer or transferee elects to apply the credit against its sales and use tax liability
If enacted, the law would take effect July 1, 2017.
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Louisiana (H 671)
House Bill 671 proposes to offer an additional 5% credit on base investment costs expended at a state-certified motion picture infrastructure project which also received motion picture program tax credits.
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Louisiana (S 78)
Senate Bill 78 proposes to amend the motion picture production tax credit by requiring a production to be certified on or before June 30, 2017 in order to qualify for the incentive.
If enacted, the act would become effective July 1, 2017.
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Maine (S 501)
Senate Bill 501
proposes to eliminate the visual media production tax credit and amend the visual media reimbursement program as follows:
- Increases the amount that may be reimbursed from 12% on resident labor and 10% on non-resident labor to 25% of all qualified visual media production expenses, including wages;
- Includes wages and salaries of each worker on which taxes have been paid, if those wages do not exceed $75,000 per individual;
- Requires applicants for the reimbursement program to be residents of Maine;
- Requires at least 25% of above-the-line positions (as defined) and at least 50% of below-the-line positions (as defined) be Maine residents;
- Requires that qualified production expenses exceed 50% of the total production expenses or at least 75% of the total principal photography days occur in Maine;
- Requires productions to provide evidence that 50% of direct production expenditures occurred in Maine; and,
- Establishes a maximum rebate of $750,000.
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Nevada (A 492)
- Limits the total amount of credits allowed per fiscal year to $10 million beginning July 1, 2017; and,
- Allows any unallocated funds remaining at year-end to be carried forward and available in the next or any future fiscal year.
If enacted, the law would become effective July 1, 2017.
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New York (A 7142)
Assembly Bill 7142 proposes to add Rockland County to the list of those counties eligible for an additional 10% credit on below-the-line salaries and wages. If enacted, the law would take effect immediately.
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New York (A 7182)
Assembly Bill 7182
proposes to amend the empire film production tax credit program as follows:
- Extends the film production tax credit to qualified converted industrial space ("QCIS") expenses, defined as costs, excluding post production costs, attributable to:
- (i) the use of tangible property at a QCIS film production facility;
- (ii) the performance of services at a QCIS film production facility; and,
- (iii) wages qualifying for the additional 10% credit for services performed in upstate counties;
- Requires a facility to fulfill the following criteria to be considered a QCIS film production facility:
- (i) be located in a current or formerly designated manufacturing district;
- (ii) be owned or leased by a QCIS film production company; and,
- (iii) contain at least one sound stage meeting certain specifications.
- Requires a company to satisfy the following criteria to be deemed a QCIS film production company:
- Own or lease a QCIS facility;
- Employ at least 800 full-time staff in New York, 500 of which must be located at the QCIS facility; and,
- Invest at least $35 million in capital expenditures to repurpose the facility as a film production facility;
- Requires an applicant to meet the minimum spend requirement of $50,000 in QCIS expenses and expend at least 34% of the total production costs (excluding post production) on QCIS expenses;
- Allows a QCIS film production company to claim the credit on compensation for writers, directors, producers, performers, and the costs of a story, script or scenario to be used for a qualified film;
- Allows a company to submit an interim application for a credit once the minimum spend threshold is met regardless of whether the film has been completed; and,
- Prohibits a taxpayer from claiming a credit for QCIS expenses if it has previously claimed the benefit of the film credit on such costs.
If enacted, the law would take effect immediately and apply to taxable years beginning on or after January 1, 2017.
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New York (A 7270)
Assembly Bill 7270 proposes to amend the empire state film production credit to allow television writer and director fees as eligible costs, subject to the following provisions:
- Limits fees to:
- $50,000 per episode for each writer or director who receives an on-air screen credit;
- $75,000 per series of episodes for each writer not receiving on-air credit; and,
- $150,000 per series per season for each eligible writer or director;
- Allows fees for only those writers who report to work regularly in a writers room located in the state;
- Requires a writer or director to be a member of a minority group or a woman in order for his or her fees to qualify; and,
- Establishes an annual cap of $5 million in credits per tax year for costs associated with writer and director fees.
If approved, the amendment would take effect on the one hundred twentieth day after becoming law and apply to the tax year in which it takes effect and all subsequent tax years.
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North Carolina (H 850)
House Bill 850 proposes to amend the Film and Entertainment Grant program in North Carolina as follows:
- Creates a grant for permanent resident individuals producing a feature length film;
- Reserves funds for feature films with qualifying expenses of at least $100,000 but not more than $500,000; and,
- Allows up to $5 million of unencumbered, unexpended funds in the Film and Entertainment Grant Fund to be used for purposes of the small productions grant.
If approved, the proposal is effective when it becomes law.
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California
The California Film and TV Tax Credit Program 2.0's application window for Relocating TV Series and Recurring TV Projects, both Non-Transferable Credits, is May 22, 2017 - May 29, 2017.
Applications are ranked within categories based upon their "jobs ratio" score. Projects that rank in the top 200% are will be notified by May 30, 2017 to submit Phase II documents within three days of such notification. Credit Allocation Letters will be not be issued until July 1, 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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