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is often simplified. Actual IRS procedures are complex, and taxpayers
should obtain professional assistance or use IRS sources for complete
information.
The
United States Film Industry Although
a number of US states offer local level incentives
for film production, there was until 2004 no national
level incentive structure as such.
'Runaway'
Productions
Competing regimes began to spring up in Canada
and other English-speaking countries which began
to attract what is known as 'runaway' US film
production.
Legislative
Support For Film Production Many
industry observers have proposed that the United
States or individual states offer comparable tax
incentives to encourage production in the United
States.
State
Tax Incentive Regimes For Film Production From
time to time, the IRS launches an all out attack
on tax shelters, and the shelter industry retreats
- but it is soon back again, applying all its wits
to the creation of ever more intricate ways of minimising
corporate tax bills.
The
United States Film Industry
Although
a number of US states offer local level incentives
for film production, which are described below,
there was until 2004 no national level incentive
structure as such other than the usual tax shelter
equation whereby investment into film production
costs is deductible and taxable returns come only
after an interval of years. The problem with films
as an object of investment (as compared say with
trees) is that the returns are far from guaranteed.
Therefore the average investor will not choose
films to invest in unless additional tax incentives
are given.
However,
the American Jobs Creation Act of 2004 included,
amongst a myriad of other business tax breaks,
a measure to benefit small movie production, basically
allowing full write-off of production costs up
to US$15m, at a presumed cost of US$336m. The
limit rises to $20m for production in low-income
communities in Alabama, Arkansas, Illinois, Kentucky,
Louisiana, Mississippi, Missouri or Tennessee.
Original
wording in the Senate bill would have given much
more to Hollywood, but it is supposed that House
Republicans were angry that the Motion Picture
Association of America had picked as its top lobbyist
Dan Glickman, a secretary of agriculture in the
Clinton administration.
In
fact, there were loopholes in the US tax system
around the early '70s that allowed people to produce
films and records and take most of their cost
of production as a credit (not a deduction) against
their tax bill. This resulted in thousands of
wealthy professionals suddenly going into the
film and record production businesses offering
an unprecedented opportunity to get new projects
funded. But these loopholes were plugged in 1978.
The
United States Film Industry Although
a number of US states offer local level incentives
for film production, there was until 2004 no national
level incentive structure as such.
'Runaway'
Productions
Competing regimes began to spring up in Canada
and other English-speaking countries which began
to attract what is known as 'runaway' US film
production.
Legislative
Support For Film Production Many
industry observers have proposed that the United
States or individual states offer comparable tax
incentives to encourage production in the United
States.
State
Tax Incentive Regimes For Film Production From
time to time, the IRS launches an all out attack
on tax shelters, and the shelter industry retreats
- but it is soon back again, applying all its wits
to the creation of ever more intricate ways of minimising
corporate tax bills.
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