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Film Tax Credit Bill Unanimously Passes California Assembly

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[May 29, 2014]  By Jennifer Chaussee
 SACRAMENTO Calif. (Reuters) - A bill to lure filmmakers into California with tax incentives passed unanimously in the state Assembly on Wednesday, bringing the state a step closer to extending and increasing existing tax credits for the entertainment industry.

Certain television shows, major feature films and independent films would have access to a larger pool of increased tax breaks under the measure, which has received bipartisan support since it was proposed in February.

Republican Assembly member Scott Wilk, who co-authored the bill, has promoted the measure as a way to create and retain jobs by sweetening the pot for the film industry, which he said has been migrating outside of California since the late 1990s because of better tax credits offered elsewhere.

“The expansion of the film tax credit is a necessity to keep the iconic film industry in our own backyard,” Wilk said. “This unique industry will continue to serve as an economic resource as long as we support the industry and keep California competitive.”

The film tax credit bill, which now heads to the state Senate, would add a five-year extension to an existing tax credit program for the film industry at large, called the California Film and Television Job Retention Act.

Under existing law, certain filmmakers and TV show producers in California can apply for tax credits of 20 percent through a lottery system that had been due to expire at the end of the 2015 fiscal year.

The measure that passed the assembly on Wednesday would extend those existing tax credits for another five years while also offering an additional 5 percent tax credit to production companies that relocate to California from outside the state.

It would add an additional 5 percent tax incentive for films shot outside of Los Angeles to give those areas an economic boost. It would also make it easier for filmmakers to qualify for an incentive overall by requiring only 75 percent of filming to be done in the state, rather than 75 percent of production.

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The California Film Commission would be in charge of dispensing and administering the tax credits program. An analysis of the bill says the tax breaks would result in the loss of hundreds of millions of dollars from the state’s budget each year.

The measure comes a day after Wilk, along with other lawmakers whose districts are mostly in or around Los Angeles County, voted against a bill requiring actors in pornographic films to wear condoms during sex scenes.

A trade group for the pornography industry warned that the condom bill would drive the industry out of the state. Wilk's district encompasses the northern part of the San Fernando Valley, where the bulk of the pornography made in the United States is produced.

(Editing by Cynthia Johnston and Ken Wills)

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