Upping the ante on the state’s production incentives, Hawaii’s legislature is considering an expanded wage credit for Hawaii productions to give the state an advantage in competing with other film locations around the world.
Billing itself as Hollywood’s “tropical backlot,” Hawaii has doubled for Dublin, the Philippines, Venezuela, as well as some African locales.
Two sets of incentives are already in place. One, an investment tax credit that gives investors in qualified Hawaii-based projects a 100% tax credit within a five-year period (Act 221, Session Laws of Hawaii 2001), is geared toward high technology applicable to a television and film production companies wishing to establish a presence in Hawaii. The other, the Motion Picture and Film Production Income Tax Credit, is a 4% refundable tax credit on production expenditures — including purchases and payroll — and a 7.25% refundable hotel room tax credit for television and film production in Hawaii.
Last month, the Hawaii state and county film offices hosted a producers dinner at Le Dome in West Hollywood to create awareness of the tax and investment incentives available for film and television production.
Chris Lee, film producer and former president of production for TriStar and Columbia Pictures, joined the film offices in hosting the Producers Dinner. Lee, who just wrapped production on Warner Bros. feature “Ecks vs. Sever,” starring Antonio Banderas and Lucy Liu, sits on the Hawaii Television and Film Development Board appointed by the governor of Hawaii.
“Having had the experience of producing in Hollywood and Canada, and now looking at Hawaii from a producer’s perspective, I’m happy to share my knowledge of what it will take to make Hawaii a more competitive place for production,” said Lee, a native of the islands.
Specifically, there are two sections of Act 221 that apply to the film and television industry:
Section 235-110.9, Hawaii Revised Statutes, provides a 100% investment income tax credit applied in percentages, spread out over five years, to investors in performing arts products, and applies to investments made in taxable years between Dec. 31, 2000, and Jan. 1, 2006.
Section 235-7.3, HRS, states that royalties derived from performing arts products are excluded from income and not subject to state income tax.
Under the Motion Picture & Film Production Income Tax Credit, a film or TV project will receive 100% of the credits if a Hawaiian name or word is used in the title; Hawaiian scenery, culture or products are used onscreen; a minimum of $2 million for a feature pic or $750,000 for a TV pilot/episode/series is spent; and distribution achieves a minimum of 66% of national U.S. coverage. There are also guidelines for recovering 75% of the credits.
“Hawaii understands the importance of tax incentives as part of our overall promotion efforts,” said Donne Dawson, manager of the Hawaii Film Office. “We are the premier tropical film location in the world, and the scenic beauty of our locations combined with the quality of our accommodations and infrastructure are unbeatable. However, we know that production decisions are not based on aesthetics alone, and we are working very hard to compete on the financial level.”
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Asheville, N.C., is hoping to join Wilmington and Charlotte as the third high-profile production hub within the state. CBS and Spelling Television are filming the pilot episode of “Jo,” which revolves around a mother-daughter team who run a veterinary hospital in Asheville. Andie MacDowell stars.
North Carolina is already home to one weekly network TV series, “Dawson’s Creek,” shot in Wilmington and the Triangle. ” ‘Dawson’s Creek’ employs 100 crew people who work up to eight months a year,” said North Carolina Film Office director Bill Arnold, who added that the production generates nearly $25 million in revenue to the state per season.