The expired federal production tax incentive — known as Section 181 of the Internal Revenue Code — remains alive, thanks partly to the efforts of veteran financier Emily Hunter Salveson.
She’s launched Streamline Global Group Film with a dozen projects made up exclusively of movies grandfathered under IRC 181. That provision allows producers to deduct up to $15 million of the expenses from movies and TV shows in the year that production starts, rather than having waiting until a project is released.
None of the 12 films are completed, but they qualify for the tax credit — which was not renewed by the U.S. Congress at the start of 2017 — because some production has already taken place. The provision, enacted in 2004 as part of the American Jobs Creation Act, was designed to stem the flow of runaway production to foreign countries offering tax breaks to lure away American productions.
The films on Streamline Global Group Film Fund’s grandfathered Section 181 slate include:
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— “Change of Heart,” based on the New York Times bestselling novel by Jodi Picoult with producer/UTA founding partner Cynthia Droke.
— “Come Home” with British director Ben Charles Edwards.
— “Angels in the Sky,” produced by former Paramount executive Mike Flint and written by Robert Pool (“Armageddon”). The story is set in 1948 in the wake of Israel’s declaration of independence, which led to overseas pilots and crews entering the fledgling Israeli Air Force during the subsequent nine-month war for independence.
Salveson is executive producing the projects, along with attorney Hal “Corky” Kessler of the Chicago law firm Deutsch, Levy & Engel — a specialist on the federal tax break. She’s started meeting with potential investors and has opened an office in West Hollywood for Streamline.
In order to qualify, 75% of the film must be shot in the U.S. The IRC 181 tax deduction applies to the first $15 million of a movie’s budget, and it can be combined with other state and federal tax benefits that provide additional capital to the film. The football drama “Greater” and Jonathan Winters documentary “Certifiably Jonathan” used the provision.
“We have developed new financial models to attract capital that would otherwise be unavailable to the film industry,” Salveson said. “Films are the byproduct of the comprehensive tax planning strategies we employ for our clients.”
Salveson founded EHS Media Capital in 2015 and completed its first film finance deal in 2015 with the Civil War drama “Union Bound,” starring Oliver Stone’s son Sean Stone.
Salveson told Variety that it’s likely that newer films will not be eligible for this type of funding. “We believe Hollywood should advocate for the renewal of IRC 181 for the benefit of the entire entertainment industry,” she added.
Salveson comes from a legacy of notable financial industry figures. She’s the granddaughter of Melvin Salveson, the creator of MasterCard, and the great-grandniece of Gerald Loeb, the co-founder of E.F. Hutton, who was involved with financing “Run Silent, Run Deep” and “The Fountainhead.”