New tax incentives aim to lure filmmakers
With film production steadily departing our shores, states are coming up with innovative ways to keep production within their borders.Connecticut’s General Assembly passed legislation granting a tax credit equal to 30% of qualified digital and film production, pre-production and post-production expenses in the state exceeding $50,000. In addition, the state will waive sales tax for certain materials, including film and video stock, as well as for buying, renting or leasing production or sound recording equipment. The 12% tax on hotel stays exceeding 30 days will also be waived. And just to make it interesting, equipment or machinery used in the production of film, video and sound recording will be given a property tax exemption. The credit, which took effect July 1, is administered by the Connecticut Commission on Culture and Tourism and its new Digital Media and Motion Picture Division. Pics currently lensing in the state include “In Bloom,” from 2929 Prods.; “Ladies and Gentlemen, the Bronx Is Burning,” from Disney/ESPN; and NBC Universal’s “Reservation Road.” “These three projects that are in production simultaneously in Connecticut is significant given that we just passed tax credits in May and our legislation only became effective July 1,” said Connecticut Film Division director Heidi Hamilton. “It clearly demonstrates that Connecticut is already being viewed as a player among its sister states. The Northeast region is making a strong effort to both lure business and create additional production options for the industry.” Meanwhile, Vermont has opened its coffers to offset production costs in the form of a Film Production Grant Program, authorized by Senate Bill 165, as part of an overall economic development bill. Incentive, which is actually a grant from the state, reimburses 10% of local spending for productions spending $1 million or more, with a $1 million cap. Most feature pics and TV shows can qualify, though gameshows, fund-raisers and sporting events cannot. Salaries of more than $1 million are also excluded from calculation as in-state spending. The annual grant is available on a first-come, first-served basis, and producers will receive their funds after completion of principal photography. “Vermont has a lot to offer,” said Danis Regal, director of the Vermont Film Commission. “We’ve got natural beauty, four seasons and everything from resort towns to traditional New England villages to the hip cafe culture of Burlington.” In addition to the grant, the state will continue to waive taxes on hotel stays of 30 days or longer and does not tax out-of-state actors in excess of their home state’s rate. Pennsylvania has decided to ditch its Film Production Tax Credit program in favor of its Creativity in Focus: The Pennsylvania Film Production Grant Initiative, which took effect in July. Productions will receive up to a 20% film production grant for expenses incurred in the commonwealth. Feature films, telepics, pilots or episodes of a TV series can qualify if 60% of the total production expense is incurred in Pennsylvania, with a $10 million annual cap. Pennsylvania also offers fee-free locations and use of its municipally owned Navy Yard Soundstage, a manufacturer’s sales tax exemption certificate for goods purchased for production use and a 14% hotel tax exemption for stays over 30 days.