By Nathan Howe
The end of summer gives filmmakers the opportunity to reflect on recent legislative changes, market outlook, and where to plan on filming their next blockbuster. Over the years, many states have adopted an incentive program to keep media production in their home state. These incentive programs include, but are not limited to, tax credits, grants, and rebates. The summer of 2017 was a highly contentious season for the film industry in the United States as the legislation for film was threatened, changed, and expanded. It is important to take note of these occurrences in the major film market states:
Massachusetts: Massachusetts has been home to many popular films such as Black Mass, Jaws, Good Will Hunting, Ghostbusters and currently, X-Men, I Feel Pretty; and Castle Rock, the first television series produced in the state in almost thirty years. However, the future of the film industry was threatened this summer when the Senate proposed a significant scale back of the incentive program. The proposal would have increased the proportion of funds required to be spent in the state, limiting the tax credit eligibility for the film, and would have instituted a cap on certain qualified expenses. Fortunately, the proposal was defeated and the Massachusetts Film Tax Credit Program remains one of the strongest in the country.
Louisiana: When Canada began offering lucrative incentives for filmmakers, Louisiana was the first state to take the lead in bringing film production back to the United States. Over the years, Louisiana underwent changes to the incentive program but recently made major modifications to the program. Under the new law, an annual issuance cap was put in place, along with lower project caps for films and TV series, smaller incentives, and a lower threshold for qualified expenses. Most notably, the former tax credit is now being treated as a rebate, shaping the way films can monetize the inventive and raise funding for the film. The new changes have disrupted the way filmmakers finance films, and have left a degree of uncertainty in the marketplace. However, filmmakers, financiers, and the state are optimistic about the new program and the economic impact it will have on the state.
Florida: Florida used to have a robust film incentive but scaled it back in the recent years. However, Miami-Dade County wants the film program back, and created its own incentive program. The incentive is in the form of a rebate, and to qualify, a production would need to spend over $1 million in the county, employ at least 50 people, and spend the majority of principal photography in the county. The $100,000 rebate per film is just a fraction of the $300 million state incentive that expired but demonstrates the enthusiasm in Miami-Dade to keep film production in the county.
Economic Impact:
Georgia: The film industry generated $9.5 billion in economic activity in the state during fiscal year 2017.
New Mexico: The Governor recently announced that over half a billion dollars of economic activity was generated in 2016 from film production. That is up by more than $115 million from the previous record.
New York: In only the first quarter of 2017, the New York film industry hired over 45,000 workers and the state issued over $150 million in rebates.
As the Fall season approaches, and the film industry continues to generate content, filmmakers need to strategize on how to finance their next feature film. Clocktower Tax Credits stands ready to help filmmakers and producers to generate maximum incentives, and provide cash for such incentives. Our comprehensive brokerage service as well as our large lender network allow producers access to capital so that they can focus on their core competency, filmmaking.
For more information, please contact Nathan Howe at (978) 460-4244 or NHowe@clocktowertc.com.