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Saturday, April 19, 2014

NY Times: Hollywood Begs for a Tax Break in Some States, Including California

HollywoodNew York Times:  Hollywood Begs for a Tax Break in Some States, Including California:

Nationwide, about $1.5 billion in tax breaks is awarded to the film industry each year, according to a 2012 survey by The New York Times. Several tax policy groups oppose film incentives; a 2010 report by the nonprofit Tax Foundation said states justified them using “fanciful estimates of economic activity” and they largely just shift production from one sector to another without producing a net increase in economic activity or employment. ...

In California, a new law would expand the film credit program to cover not only smaller films and new TV series as it does now, but also major studio productions that cost as much as $100 million, and expensive, established television shows. ...

Supporters of the proposed increase in tax incentives for Hollywood point to a report published by the Milken Institute in February noting that California lost more than 16,000 production jobs since 2004, while other states with substantial subsidy programs, including Texas and North Carolina, together gained that many, and more.

Louisiana last year served as the location for 18 of 108 feature films, versus 15 in California, according to FilmL.A., which monitors film permits in Los Angeles County. Los Angeles logged about 7,000 feature film location shooting days last year, down 50 percent from a 1996 peak of roughly 14,000 days, while television dramas were shot on location here for about 4,100 days, down 39 percent from their recent peak in 2008.

“This iconic California industry is at a tipping point from which it might not return,” Kathy Garmezy, a senior executive at the Directors Guild of America, said last week. ...

The proposed enhanced tax incentives will face a serious test in the California State Senate, which was recently stung by the indictment of Ron Calderon. Mr. Calderon has pleaded not guilty to charges that, among other things, he tried to peddle his influence over film subsidies to an undercover F.B.I. agent posing as a Hollywood executive.

Prior TaxProf Blog coverage:

(Hat Tip: Mike Talbert.)

http://taxprof.typepad.com/taxprof_blog/2014/04/ny-times-hollywood.html

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