California significantly increased tax credits to incentivize the location of film and TV production in the state of California in late 2014. I’ve written about it and its impact, here, back in 2016. How is it doing since then? The California Film Commission, the government entity responsible for administering the tax credit program, issued a Report examining the impact of the program over the last three years from 2015 to 2018. A press release concerning the Report states:
Employment – in terms of hours worked in-state by below-the-line crew members. Program year-three continued the long-term growth trend with a 15.6 percent increase in hours worked in 2017 compared to 2014 (the year before Program 2.0 began). This growth builds on 2016’s 12 percent increase over 2014. These figures are based on data for below-the-line workers including Teamsters, IATSE members, basic crafts and others covered under the Motion Picture Industry Pension & Health Plans. In addition, Los Angeles-area sound stages are operating at near capacity (as reported by FilmL.A.), which is leading to substantial growth in construction for new stages and production support facilities.
– Big-Budget Films (over $75 million) – which are a target for the uncapped incentives offered by other states and countries. During year-three of Program 2.0, California attracted five additional big-budget films (“Call of the Wild,” “Captain Marvel,” “Ford v. Ferrari,” “Island Plaza” and “Once Upon a Time in Hollywood”). To date, the expanded tax credit has attracted a total of 10 big budget films.
– Relocating TV Series – which have their own dedicated allocation of tax credits. During year three of Program 2.0, California attracted two additional relocating TV series (NBC’s “Timeless” from Vancouver, and Amazon Studios’ “Sneaky Pete” from New York). To date, the expanded tax credit program has gained a total of 15 relocating TV series from across the U.S. and Canada.
– Production Activity Statewide – for which Program 2.0 provides an added incentive uplift. During the program’s first three fiscal years, tax credit projects spent a total of more than $78 million in 19 counties outside the Los Angeles 30-Mile Zone. This figure will continue to rise as more tax credit projects for year-three (and prior years) report their out-of-zone spending.
Moreover, the supposed impact of Captain Marvel on the local California economy has been estimated to be around $100 million. The latest installment of Sherlock Holmes will also be shot in California, estimated to provide another $100 million boost to the local California economy. Notably, Governor Newsom has pointed to restrictive social policies concerning abortion (mostly in Southern U.S. states, such as Georgia) as a reason for production companies to move their operations back to California.
View the original article here: Film and TV Tax Credits Working for California?
The article was originally posted on IP Finance.
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