GIMME A (TAX) BREAK
It’s pretty unusual to wake up in the morning and read entertainment industry news detailing benefits specifically targeted towards independent filmmakers. But that’s what this (subscription-only) Variety piece does as it explains provisions in the just-signed American Jobs Creation Act of 2004 that make it more advantageous for investors to invest in independent film.
Writes Susan Crabtree and Ian Mohr, “After years of lobbying, independent filmmakers scored a major victory Friday when President Bush signed a bill that gives a sweeping tax break to movies made in the U.S. Producers believe the measure may draw substantial fresh funds into indie filmmaking.”
They go to note, “Independent producers now may write off a movie in a single year if it has a budget of $1 million-$15 million and 75% of that budget is spent in the U.S. The expensing limit increases to $20 million if the movie is made in a low-income area of the U.S….
“‘Overall, it’s good, it’s fantastic,’ said Tim Williams, production head at New York-based GreeneStreet FilmsGreeneStreet Films, who co-produced Miramax’s 2001 breakout ‘In the Bedroom.’ ‘It’s the same concept as the basis for the U.K. sale-and-leaseback (program). The trick now is for smaller companies to utilize it. Can this (bill) be used to leverage more funding on a state and local level?’
“‘It’s phenomenal,’ said Schuyler Moore, an entertainment industry tax law expert. ‘Once this gets out, it’s going to jumpstart U.S. production in an enormous way. There’s nothing like it in the entire (U.S. tax) code. It’s just astounding.'”
More on the benefits of this law as they become apparent. I already know a couple of New York producers who are huddling with their accountants to analyze the implications of the change. And please post below if you have specific insight into the impact the law will have on film investment.