U.S. producers benefit on credits

Big news on incentives comes from Texas

The battle between states for the best incentive package shows no signs of letting up. New York has enjoyed ongoing success thanks to its significant statewide and Gotham-based programs. But in 2006, the state saw its neighbors step up their games. Connecticut became the latest to instantly establish itself as a major player when it passed a massive incentive package, offering productions up to a 30% tax credit on goods, services, and labor. Unlike most states, its package includes no annual cap and no per-production cap.

Meanwhile, New Jersey created a 20% transferable, salable credit for all productions that spend at least 60% of its production budget within the state.

But activity wasn’t just limited to the East Coast. January 2006 saw the passage of Arizona’s massive program, which has already lured a number of big-budget studio pics. (The state has since increased its annual cap on rebates.) Other states that have upgraded their existing programs include Florida, Hawaii, Illinois, Michigan, Mississippi, New Mexico, North Carolina and South Carolina.

The big news to emerge in 2007 may come from the Lone Star State.

Last year, concerned members of the local production community who were sick of losing jobs to hot spots like Louisiana and New Mexico banded together to form the Texas Motion Picture Alliance (TXMPA).

This past March, the TXMPA proposed a comprehensive package to the state Legislature. And while a ruling won’t be made until later this year, Texans have good reason to be optimistic: In April, construction for the $1.5 billion Villa Muse production facility — the largest soundstage in North America — was announced. It should open next year.

Louisiana and New Mexico continue to set the gold standard for how to grow infrastructure to meet the demand created by a terrific incentive program.

Louisiana, which overcame the devastation caused by Hurricane Katrina, will begin construction this year on FilmPort, a $500 million, 925,000-square-foot studio in West Baton Rouge.

New Mexico has kept pace, having recently upped its no-cap transferable production refund (not just a credit) to 25% from 20%, made the legislation permanent and approved $2 million for job training. And a state-of-the-art complex, Albuquerque Studios, recently opened.

Upcoming studio releases that have taken advantage of programs include “Transformers” (New Mexico), “Harold and Kumar 2” (Louisiana), “Spider-Man 3” (New York) and “The Kingdom” (Arizona).

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