Illinois’ Film Production Services Tax Credit Act, the anti-runaway measure that’s gained favorable feedback from the spotmaking community, is slated to become more flexible in terms of transferability effective January 1, 2006. The change could result in a greater number of commercial producers taking advantage of the wage-based tax credit, which the state legislature recently extended to run through the end of ’06. At press time, Gov. Rod R. Blagojevich (D-Ill.) was expected to sign the bill, which would grant final approval for the new version of the filming incentive. As chronicled in SHOOT, the tax break initiative first took effect in 2004, and was renewed for ’05. Now it’s set for at least one more full calendar year. The Illinois program continues to provide a 25 percent tax credit, which applies to the first $25,000 in wages per worker per production. (Excluded from the tax credit are the two highest paid Illinois workers on a project.) Workers must be Illinois residents hired for a qualified feature, TV program, commercial or sponsored content piece lensed in the state. Projects for advertising purposes (30 minutes or less), including spots and branded entertainment, can receive the tax credit as long as each has a minimum of $50,000 in wages being paid to Illinois residents. (For features and TV programs, each production has to spend at least $100,000 on Illinois labor in order to be eligible for the tax credit.) In addition to the filming crew, the 25 percent wage tax credit applies to other key components of Illinois’ resident workforce on a given project. These include editorial labor, acting talent and use fees up to one year, and agency labor (i.e., creative director, art director, copywriter, head of production, producer) from the time the final storyboard is finished through production and post. The tax credit can additionally apply to the labor costs of other Illinois-based entities, such as a caterer, a casting agency or set construction firm. In calendar year ’06, tax credits earned will be fully transferable and can be carried forward for five years. These changes will help make the credits much more accessible for companies without significant Illinois tax liability and will eliminate complicated legal steps previously required. For example, in order to qualify for the filming incentive, an out-of-state company currently would have to consider establishing a limited liability corporation (LLC) for a particular project, and to make a business or entity that has Illinois tax liability a special member of that LLC. A production company, ad agency or advertiser in California could form such an LLC for a job that entailed filming in Illinois. That LLC could, for example, enter into a tax credit deal with a plumbing business in Illinois for 85 cents on the dollar. In exchange for the LLC allocating to it let’s say a $100,000 Illinois tax credit, the plumbing company would pay $85,000 to the LLC. But in ’06, transferability will make it easier for companies filming in Illinois to tap into the state tax credit program. Transferability enables the recipient of the credit to legally sell it to another party. This particularly benefits a company or individual that doesn’t anticipate that they will owe enough in Illinois income taxes to use up the credit that they have earned. The incentive also becomes more attractive for a company or individual who wants to have a more immediate financial benefit from the credit, rather than waiting until they file their annual Illinois income tax return to make use of it. The transferability figures to make the measure more appealing across the board, particularly to producers of TV commercials and smaller independent films. Meanwhile effective in ’06, the five-year, carry-forward provision will add to the value of the incentive by assuring the holder will have several years to apply the credit against Illinois tax liability. If a company, for instance, earns a $100,000 credit but only has an $80,000 tax liability, that remaining $20,000 credit can now shift over to the following year or years. While this flexibility is welcomed, at one point several in the industry had hoped to make tax credits refundable, meaning that under the just stated example, the $20,000 difference would have been refunded that same year. But there is no refundability allowance in the new measure for ’06. SPOT PERSPECTIVE “This legislation is a boon for commercial production in Illinois,” said Mark Androw, chairman of the Association of Independent Commercial Producers (AICP). “The tax credit savings are significant, generally around ten percent of the total gross commercial production costs. Jobs with large talent costs and use fees will see significant savings. The improvements in the legislation from the previous bill makes this a very easy to use, effective incentive for shooting commercials in Illinois.” Androw is the Chicago-based executive producer of The Story Companies, which also maintains offices in New York and Santa Monica. He additionally serves as a board member of the Illinois Production Alliance (IPA), an organization formed in ’02 to help make the state more competitive in filming, content creation and development. The AICP and the IPA lobbied legislators for the passage of the original tax credit bill in ’04 and its subsequent renewals. According to Androw, the savings realized thus far have been substantive in the commercialmaking community. He said that due to the tax credit program, an advertiser–whom he declined to identify–got back $145,000 over the course of a year’s worth of production in Illinois. He estimated that the average savings on a spot project amount to $30,000 to $50,000. The five-year, carryover feature of the tax credit beginning in ’06 could also prove attractive to advertisers who currently don’t have much tax liability in Illinois. As a hypothetical example, a client like United Airlines, which is going through much publicized financial difficulty, may not have enough Illinois tax liability to immediately benefit from a credit. But over the next four years, if the client hopefully turns around its situation, there would be ample liability to which tax credits earned in ’06 could be applied. “The bottom line is that this is an incentive that encourages more production to be done in Illinois–and in the U.S.,” related Androw. ADDITIONAL 10 PERCENT The just renewed Illinois film incentive measure additionally allows for a 10 percent increase in the tax credit as it applies to certain workers. The incentive goes up to 35 percent of the first $25,000 in wages per individual if that worker lives in impoverished, high unemployment areas of Illinois. This provision was added to the initiative to help make crews more diverse. The legislation also requires a production applying for a tax credit to file a written diversity plan, affording opportunities for minority, female and physically challenged workers. The Illinois Film Office will play a role in determining if a project has made a good faith effort to attain diversity through its hiring practices. However, no quotas have been put in place. By encouraging diversity and trying to bring more workers in the mix, the measure is looking to strengthen the state’s filmmaking infrastructure. Also towards that end of growing the talent pool, the legislation authorizes the Illinois Department of Commerce and Economic Opportunity (DCEO) to use state training program funds for workforce development and industry skills training. Such training funds may be used by the DCEO to finance union-sponsored diversity training programs. The Illinois Film Office is under the state’s DCEO. Androw noted that commercialmaking in Illinois even benefits from increased feature and TV program lensing in the state resulting from the tax credit program. The incentive is credited with helping Illinois visual media business to rise 200 percent in ’04 with 1,200 new production jobs as major motion pictures such as Ice Harvest, Amityville Horror and Batman Begins came to the state. The growth has continued in ’05 with six feature films currently slated to shoot in Illinois this year, according to the Illinois Film Office. Fox Television recently green lit 13 episodes of a new series, Prison Break, to film in Chicago and Joliet, Ill. Increased filming activity, said Androw, helps to groom new crew talent and makes it more inviting for companies to invest in Illinois production support resources, such as stages. Androw noted that a new stage complex, Resolution Digital Studios, opened this year in Chicago, making the state’s infrastructure stronger.
SUPERLATIVE Signs Director Claudia Abend For Spots and Branded Content
Latin American director/editor and documentary filmmaker Claudia Abend has joined SUPERLATIVE for her first U.S. representation spanning commercials and branded content.
Abend's empathetic docu-style POV has garnered several international awards for the documentary films Hit (2008) and The Flower of Life (2018). Her spotmaking credits include such brands as Procter & Gamble, Nestle and Blue Cross/Blue Shield. SUPERLATIVE has already worked with Abend, together producing a new ad campaign for digital agency Tinuiti and The Honest Company, a consumer goods corporation featuring eco-minded products.
“We found Claudia through her poignant documentaries on the festival circuit,” said SUPERLATIVE creative manager Stefan Dezil. “We are excited about her textured narratives, emotional storytelling, and her powerhouse long-form storytelling abilities, currently on her third feature film. As SUPERLATIVE continues to build our brand after premiering our latest films at Sundance and SXSW, Claudia is the kind of multidimensional artist we are excited to partner with on branded content and beyond. Fluent in English and Spanish, her reel shows real prowess with infants, food and skin products, families both young and old. Great visual storytelling and inspirational doc work.”
Abend began her career in her native Uruguay, studying film and editing in college. “My dad would show me films like Citizen Kane,” she said. “I love cinema and became an editor. It was here that I learned all about communicating human emotion.”
From the get-go, Abend hit it big as a documentary director, teaming with Adrianna Loeff on Hit, a movie chronicling pop artists of Uruguayan music. Abend took home a Best Editing... Read More