The Association of Imaging Technology and Sound (ITS) hopes to push through legislation that would provide post facilities with an investment tax credit to help make the Federal Communications Commission (FCC)-mandated transition to DTV, including HDTV, more economically feasible. At press time, Congress had reconvened as the ITS was looking to secure additional legislative co-sponsors for its R&D tax credit bill. Thus far, four sponsors in the U.S. House of Representatives have been secured: Rep. Jerry Weller (R-Ill.), Rep. Mark Foley (R-Fla.), Rep. Xavier Becerra (D-Calif.) and Rep. Robert Matsui (D-Calif.).
The ITS would like to have the tax measure introduced this week in the House of Representatives, since Congress is scheduled to adjourn around mid-October. The quartet of initial sponsors—two Republicans and two Democrats—reflects bipartisan support, which ITS president Terry Rainey said is key to gaining passage. Reps. Weller, Foley, Becerra and Matsui have sent a letter to their Congressional colleagues, asking them to vote in favor of the legislation.
The ITS has asked its members throughout the country to urge their local elected representatives via phone, letter, fax and/or e-mail to approve the investment tax credit. Over the past few weeks, the ITS has provided its rank-and-file with a letter that can be sent to members of Congress. The ITS has also outlined talking points to help facility executives and artisans articulate the industry case in phone conversations with their local Congressional officials.
Rainey and ITS government affairs manager Tracy Murley said that the R&D tax credit figures to be packaged with other tax-related bills, and might even take the form of an amendment to major tax legislation.
The proposed R&D tax credit would be computed at 20 percent of a domestic post company’s current capital expenses incurred for digital post machinery and equipment—less a dollar amount equal to the facility’s average annual gross receipts from DTV post services during the prior four years. The intent is to encourage the domestic construction of an advanced digital post infrastructure when the current demand for such services may not justify the required expense. The measure is structured to effectively increase the threshold for tax credit qualification as the revenue generated by digital television post services grows. Digital postproduction equipment would be defined in the context of the Advanced Television Systems Committee standards, which have been adopted by the FCC for digital TV. Among those qualifying for the proposed R&D tax credit would be digital video and audio post facilities, animation houses and post equipment rental companies.
Rainey acknowledged that with the national election approaching and President Clinton’s recent tendency to veto tax break legislation, the ITS-backed measure has a tough road to hoe. "We have a realistic view, not a pessimistic one," assessed Rainey, noting that even if the bill doesn’t pass, the industry lobbying effort will strengthen the prospects for gaining an investment tax credit in the next session of Congress.
