A recent report from the Los Angeles County Economic Development Corp. (LAEDC) concludes that California’s Film and Television Tax Credit is paying off handsomely for the Golden State.
The LAEDC study estimated that the first 77 productions approved for the initial tax credit allocation of $198.8 million represent some $970 million in total qualifying expenditures which in turn will generate more than $3.8 billion in economic output in California and support 20,040 jobs with labor income of nearly $1.4 billion. Total resulting state and local tax revenues are estimated to reach some $201 million.
The LAEDC found that for every $1 million in qualifying expenditures, the nine productions on which the research was centered will generate $3.9 million in economic output and support 21 jobs with labor income of $1.4 million. Each $1 million of qualifying expenditures will result in some $207,000 in state and local taxes. Furthermore, these returns do not take into account how the appearance of California locations in films and television positively impacts tourism, a major economic engine in the state.
The report comes at a fortuitous time in that a five-year extension to the program is under consideration and reportedly on the road to final approval. Currently, the tax credit is set to expire in 2014.
However, the LAEDC report has been taken to task by Los Angeles Times columnist Michael Hiltzik for what it doesn’t contain–namely a disclosure that it was commissioned by the Motion Picture Association of America (MPAA), a proponent of subsidies for its members’ productions.
Still, there’s a strong case to be made for incentives in that runaway production has taken an undeniably major toll on the state’s economy. And it’s safe to say that the tax credit program has made California more competitive against other states and countries, retaining business and jobs that otherwise would have departed.
It’s another omission–from both the tax credit and the LAEDC report–with which I take issue. Neither includes commercials.
The tax credit applies to only select theatrical feature films (budgeted at $75 million or less) and certain TV programs. In questioning whether to expand the reach of the incentives, the LAEDC report looked to bigger budgeted features and network TV series, finding that both would generate a return on investment exceeding the state subsidies.
But the study contains nary a mention of commercials and what they mean to California’s economy. The conspiracy theorist might think that the alleged MPAA influence translated into spots not even being considered in the scope of the study. Or perhaps it’s just the age-old allure of features and television that has once again overshadowed the significance of the advertising industry. Yet make no mistake that in the world of filming activity, commercialmaking is a mainstay, stalwart contributor to the country’s economy.
Whatever the reason for commercials getting short shrift–or in this case, no shrift–the bottom line is that this latest lack of inclusion is short-sighted, particularly during a time of economic uncertainty.
Trump Asks Supreme Court To Delay TikTok Ban
President-elect Donald Trump asked the Supreme Court on Friday to pause the potential TikTok ban from going into effect until his administration can pursue a "political resolution" to the issue.
The request came as TikTok and the Biden administration filed opposing briefs to the court, in which the company argued the court should strike down a law that could ban the platform by Jan. 19 while the government emphasized its position that the statute is needed to eliminate a national security risk.
"President Trump takes no position on the underlying merits of this dispute. Instead, he respectfully requests that the Court consider staying the Act's deadline for divestment of January 19, 2025, while it considers the merits of this case," said Trump's amicus brief, which supported neither party in the case and was written by D. John Sauer, Trump's choice for solicitor general.
The argument submitted to the court is the latest example of Trump inserting himself in national issues before he takes office. The Republican president-elect has already begun negotiating with other countries over his plans to impose tariffs, and he intervened earlier this month in a plan to fund the federal government, calling for a bipartisan plan to be rejected and sending Republicans back to the negotiating table.
He has been holding meetings with foreign leaders and business officials at his Mar-a-Lago club in Florida while he assembles his administration, including a meeting last week with TikTok CEO Shou Chew.
Trump has reversed his position on the popular app, having tried to ban it during his first term in office over national security concerns. He joined the TikTok during his 2024 presidential campaign and his team used it to connect with younger... Read More