California Finally Gets Own Filming Incentive

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Paul Audley, FilmL.A. President

>After years of work by dedicated champions for entertainment industry jobs, California has a film tax incentive.  On February 20, 2009, Governor Schwarzenegger signed legislation creating tax credits for qualified film and television productions.  The funding allocation is $100 million a year for five years.

The state legislature has recognized that the filmed entertainment industry is extremely mobile and that an incentive will make California more competitive vis-a-vis other states with generous incentives.

Though the $100 million annual cap will likely mean credits will be snatched up within weeks or months of the program’s start July 1, 2009, the result will be an increase in filmed productions choosing to film in California instead of out of state, thereby creating jobs and generating tax revenue. Reports by Ernst & Young have shown that New York’s and New Mexico’s film incentives generate a net gain in tax revenue for those states.

While I welcome and believe in the future benefits of this incentive — our film production data has most effectively been used to substantiate the impact of ran-away production — I hope state leaders will analyze the incentive’s results and consider expanding the program’s scope and size in the future.

Currently, commercials and feature films with budgets greater than $75 million do not qualify under the program.  Big-budget studio films, some of which could cost double the budgetary cap, are unequalled in the number of jobs they create and dollars they pump into the economy.

But, the state’s action is a positive step towards reclaiming our signature industry.  The door is now ajar.  By throwing the door fully open, the entertainment industry can once again underpin our state’s economy to the benefit of each and every Californian.

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