Thursday, March 6, 2014

Tax Credits and the Film Industry


A few years ago everyone knew that California was the motherland of all things movies. California has Hollywood, Los Angeles, and Burbank. It’s the home to some of the largest film production companies. It’s where all the stars live, and Hollywood houses the Walk of Fame. If anyone wanted to make it in show business, they moved to Hollywood. According to an article on Forbes.com “Fifteen years ago 64% of the top 25 live-action movies were filmed in California.” Today, unfortunately that number has fallen to 8%. California doesn’t even rank 2nd in the highest film production locations.

According to a report from FilmLa stating, “with the exception of California, all of the top five locations last year were places offering “substantial uncapped film incentives programs”. Uncapped means that the state does not set a limit on how much it will spend in a given year.” Currently California has a $100 million cap in tax incentives. Apparently there is new legislation in the works. Louisiana, Georgia, and Canada are locations that have greatly been benefiting from this tax cap in California. Louisiana not only had a total of 18 big movies produced with in the state. A total of 13,690 jobs were created from this. Even though Canada had more jobs created, a total of 14,170, they produced 15 big movies, 3 less than Louisiana.

                     
                                                   Chart provided by FilmLa report.

According to the Forbes article, producer Ram Bergman says, “Movie people are nomads. We go where the best deal is”. It’s this kinds of change in the industry that is really hurting the state of California. There are a lot of freelance/contract workers that are missing out, because the work isn’t there anymore. If they want to make money, they need to move to where the production is happening, and in 2013, it is not California. Unless that legislation goes through, and the tax capping changes, production will continue to migrate to where they can get the most for their money. Right now that is states like Louisiana.

To read the full report you can download the PDF from FilmLa.