News Column

Deal nears to at least triple California's film production tax credit

August 11, 2014

By Timm Herdt, Ventura County Star, Calif.

Aug. 11--SACRAMENTO -- A deal appears to be in the works that would at least triple, to $300 million a year or more, the amount of tax credits the Legislature will provide to movie and TV producers who film their shows in California.

A bill to extend and expand the existing credit was amended Monday by Assemblyman Mike Gatto, D-Los Angeles, to increase the annual credit to $420 million.

The Senate Appropriations Committee put off action on the bill until Thursday. Its chairman, Sen. Kevin de Leon, D-Los Angeles, said he expects the version that will come out of his committee at that time will seek a lower amount, but that the figure "will be north of $300 million."

California's share of movie and TV production has dropped dramatically in recent years as other states have aggressively offered financial incentives designed to entice producers to film their shows outside of California.

As a result, the California Film Commission reports that the share of television dramas produced in California has fallen by nearly half since 2005, from 65 percent to 34 percent. In addition, industry executives note, big-budget movie productions are now almost without exception being filmed out of state.

Demand for the $100 million in tax credits the state currently offers is so great that each year the number of applications overwhelm the available amount of credits on the first day they become available. Last year, the state received 308 applications and, using a lottery system, was able to award credits to just 34 projects.

In addition to increasing the amount of tax credits and extending the program through 2021, Gatto's AB 1839 would for the first time make credits available to major film studio projects with production budgets in excess of $75 million.

The flight of film and TV production to other states has contributed to a decline in the number of high-paying jobs the industry provides in California. The nonpartisan Legislative Analyst's Office reports that in-state employment in the industry fell from 122,800 in 2004 to 107,000 last year.

The program allows producers to claim tax credits equal to 20 percent of qualified expenses, which include the salaries paid to camera operators, set designers and other production personnel.


(c)2014 Ventura County Star (Camarillo, Calif.)

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Source: Ventura County Star (CA)

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