A day prior to the start of the Association of Film Commissioners International (AFCI) 2005 Locations Trade Show this past weekend (4/15-17) in Santa Monica, a panel discussion–sponsored in part by the AFCI–took place at Loyola Law School, Los Angeles, to address how to best take advantage of filming incentives. The session focused primarily on benefits available to features and TV programs, which is understandable given what’s typically been the nature of anti-runaway legislation.
However, AFCI president Pat Swinney Kaufman–executive director and deputy commissioner of the New York State Governor’s Office For Motion Picture and Television Development–noted that by this time next year, it might make sense to schedule a panel discussion about how to capitalize on spotmaking incentives since momentum as of late seems to be building on that legislative front. “I’m making a mental note to consider putting that discussion on next year’s [AFCI Locations] agenda,” said Kaufman.
SHOOT has recently reported on filming incentive prospects for commercials in California (SHOOT, 3/11, p. 1) and New York (SHOOT, 4/8, p. 1). The latter proposal, which has taken the form of bills in the New York State Senate and Assembly, is believed to be the first major tax credit incentive designed for and exclusively targeting commercials. No measure has yet been introduced in California but word is that the administration of Gov. Arnold Schwarzenegger (R-CA) intends to push a major anti-runaway bill that will cover features, TV and spots.
While there are still significant hurdles to be cleared in order for these incentives to become reality in California and New York, clearly there’s been substantive high-powered support for lensing-related reform that is inclusive of commercials. Furthermore, Illinois is in the second year of its 25 percent wage tax credit initiative, which encompasses theatrical motion pictures, TV shows, spots and branded content.
At the same time, however, operating somewhat under the industry radar are anti-runaway measures in states outside the so-called major markets. Several of these surfaced as SHOOT made its rounds through film commission booths at the AFCI Locations event.
For example, Georgia’s legislature has passed an investment tax credit package for features, TV programs, commercials, music videos and certain interactive projects. Gov. Sonny Perdue (R-GA) is expected to sign the bill into law by the end of this month; it would take effect retroactive to January 1, ’05. The tax credits apply to qualifying film, video and interactive productions (including commercials) that have multi-market distribution, but only if they have a total of at least $500,000 in qualified Georgia production expenditures within a calendar year. This means that a commercial production company, for instance, could qualify on the basis of different spots shot in Georgia that collectively meet the $500,000 threshold during the course of a year.
Gov. Perdue’s signature is considered a formality, according to Greg Torre, director of the Georgia Film, Video & Music Office. Torre noted that the bill has been some two-and-a-half years in the making, and that the film commission pushed hard for the inclusion of spots, which represent a bread-and-butter contributor to the state economy. Torre said that commercials in particular helped Georgia to weather the storm of reduced feature and TV lensing in the state in recent years. He related that commercials have been key in keeping Georgia’s filmmaking infrastructure intact.
Regulations are in the process of being developed to define exactly how the Georgia tax credits will be applied. The base tax credit is nine percent (including the hiring of out-of-state labor), with an additional three percent attainable for all Georgia residents hired, and three percent more if shooting takes place in underdeveloped economic areas of the state.
SOUTH CAROLINA, HAWAII
Meanwhile, South Carolina has an incentive for commercials that went into effect on Jan. 1. South Carolina spot production houses–or out-of-state commercial production companies that work through a South Carolina production or production services firm–qualify for a state income tax credit equal to 10 percent of the actual investment that takes place in South Carolina. To gain the benefit, more than $500,000 must be spend in the aggregate during the calendar year.
Commissioner Jeff Monks of the South Carolina Film Commission, under the aegis of the South Carolina Department of Commerce, added that he hopes that the legislature in its current session will sweeten the deal for commercials, increasing the benefits and/or making incentives even more easily accessible.
Another example of spot-friendly incentives is starting to take shape in Hawaii. A proposal calling for a 15 percent refundable tax credit has passed all the necessary committees in the state legislature. The bill is currently in conference between the two state houses. While the political wrangling process in arriving at a state budget is unpredictable–particularly in the face of a deficit–the filming incentive proposal is clearly on the table. Its fate will probably be decided by mid-May, and if passed, the measure could take effect in the summer.
As earlier reported, slated to firmly take hold on July 1 is Los Angeles City business tax reform, which will benefit small and medium-sized production houses that lens in Los Angeles. Many of these shops are primarily involved in spotmaking (SHOOT, 11/26/04, p. 1).
While incentives were a major part of what was showcased on the Locations exhibit floor, attendees also got the chance to explore resources and the diversity of locations available around the world. More than 230 exhibitors, including 180 AFCI member film commissions from 33 countries, showcased their wares. Also in the exhibitor mix were assorted production resource companies and support services.
Though final attendance figures at the AFCI Locations Trade Show weren’t yet available at press time, it appeared that attendance from the commercialmaking industry was up over previous years. And initial projections were that the overall turnout was on track to be 20 percent greater than the 3,000 or so attendees who were drawn to Locations in 2004.