State Incentives for Motion Pictures

[Blade_Jones]

Well California and Los Angeles are both doing everything they can to SCARE filmmakers off with a proposed 25% adult entertainment tax, and the highway robbery prices they charge for film permits, etc. When location owners hear the word "movie" they instantly want to charge you up the ass. Next time I will never shoot in LA.

 

[spinner]

I'm always amazed at how many people still fall for the misleading information "state incentives" offer...Most 'seasoned' producers ONLY travel to various states if the script and story call for it...Few do it for the incentives because they know the real truth behind the incentives...As a producer with over 20 years in the business, i'm going to show anyone who reads this, the real situations going on not just with Michigan, but with all states, including Louisianna and New Mexico (the top 2 offering the most popular incentives)...

My example is based on a random $5 million feature budget with an average 20% state incentive...

Every single state has a contract that is signed when you apply for tax incentives...many vary from state to state, however, every single one has two words in the contract that most "unseasoned" producers don't pay attention to...the two words are "...applicable costs..."

As this phrase is often well hidden in the contract, it's easy to see how it's missed, however, this is the phrase that kills every film's expectations and results in nearly all producers never returning to that particular state, unless the script or story requires it...

Many of the unseasoned producers out there are given the impression that the 20% tax rebate is based on their entire $5 million budget...This couldn't be further from the truth, and most state film commissions hide this fact...In reality, "applicable costs" refers to a variety of things, however, in most cases, the following line items in your budget are EXCLUDED from the total calculations the state uses...Director's fee, producer's fees, script fee, Talent fee's (unless local talent is hired), contingency, bond fee, insurance fee, any crew member's rate if not hired locally, airline tickets, development fees, Music fees and all Post (if not done in the state)...Some states include a couple of the above fees, but most do not...In other words, roughly up to 50% of your budget is NOT INCLUDED IN THE STATE'S CALCULATIONS for your rebate!

well, here's the thing about that....

I very much consider myself to be 'unseasoned' as a producer. And given that reality, I would think that if I wanted to take advantage of the incentives, I would have to READ THE FINE PRINT. I suppose there would be things that I could take advantage of and some I would not, but I certainly would not just expect everything to just be given to me, if I didn't know what I would have to do to be eligible for the incentive.

Alot of the info may not be standard knowledge, but if you intend to use the incentives, you need to not go in blind and read up on whether or not they will be useful to you and therefore nothing is 'veiled'. This way I am not mislead. I'm right in thinking this way, aren't I? I'm not missing anything am I?

-- spinner