NEW YORK — In a season when anti-GOP docus have virtually flooded the indie film marketplace, President Bush seems to have inadvertently armed a whole new cadre of Michael Moore-like gadflies via his latest tax legislation.
Just over a week ago, Bush signed a massive tax bill that contained a provision that could aid low-budget filmmakers with tax breaks for domestically shot projects such as “Fahrenheit 9/11.”
“Fahrenheit” cost roughly $6 million to make and grossed nearly $120 million at the box office.
Ironically, the bill — which enables producers to write off in a single year the costs of a film budgeted at $1 million-$15 million if 75% of that budget is spent in the U.S. — will help mavericks like Moore and not indie arms of the major congloms.
‘No upside for studios’
“There is no upside of this bill for the studios,” said a production finance whiz at a studio subsid, who’s combing the 650-page document. “In our case, it really doesn’t do anything. I see how it can help an indie producer, and a substantially smaller business than ours.”
Majors are already able to write off the costs of films budgeted under $15 million through existing laws that allow an 18-month amortization schedule. Furthermore, the subsids of major studios don’t file separate income tax returns from their conglom parents, diminishing the value of tax benefits at the subsid level.
The new legislation could result in an even bigger boon to filmmakers if it can bring fresh financing into the indie marketplace.
One film financier raised the possibility that the law will allow individual film investors or participants in a film investment fund to take advantage of the one-year writeoff.
But This Is That’s Ted Hope, who has produced such films as “American Splendor,” wondered: “It seems like it’s relief for the major financiers and suppliers. It doesn’t seem like a job stimulus bill. So what gets created? A whole new class of lender who (will make interest off of) my $10 million.”
One powerful Hollywood Republican may have swayed the legislation.
“You cannot put down the impact that Arnold Schwarzenegger has had on all of this,” said a Los Angeles-based indie film vet, referring to Schwarzenegger’s lobbying efforts on behalf of filmmakers.
Despite giving producers what could be a significant break on low-budget movies, it seemed unlikely Monday that the move would result in many Bush ballots being cast today by Indiewood.
“I am a big believer in anything that the government can do to help (filmmakers),” said Liz Manne, a co-founder of Fine Line Features and currently partner in production and marketing consultancy Duopoly. “If (the Bush administration) are trying to give something to the (indie) film industry, it is filled with people who are independent thinkers and not likely to be easily seduced to an appeal to their pocketbook.”