State Film Tax Incentives and Culture
April 11, 2014 Leave a comment
The earliest instances of film tax incentives had the purpose of retaining and nurturing culture. Canada is a good example. The film tax incentives began in Canada to nurture “Canadian Content”. It was meant as a way to guard against the encroachment of American culture into the Canadian society. The concept of “French Canadian Culture” has certainly taken root with the film tax incentives; the English-speaking centers of Toronto and Vancouver, and even downtown Montreal, embrace the infusion of American cash while learning and matching the American skills of filmmaking – well, that’s part of their culture, isn’t it?
WHAT CULTURAL ADVANTAGES?
Culture is what the people are doing; how the people are communicating and living life. Does the action of producing television and film in a State boost the local pride, infuse the community with a way to communicate, provide a skill that can be identified? YUP! Look closely at Louisiana and Georgia. I have visited New Orleans and Atlanta as part of my film accounting workshops, and I see a group of people who are downright proud of their participation in filmmaking. Personal pride always pays dividends.
WHERE FILM TAX INCENTIVES HAVE FAILED
Those States that have failed to maintain a film tax incentive, have failed to recognize the local cultural pride and development. The State was looking at cash-in and cash-out on a short-term basis, without a second look at the cultural advantages and how that pays off.
PRODUCE YOUR FILM, IN A TAX INCENTIVE LOCATION, WITH CULTURE IN MIND
A good example is the making of “Whole Nine Yards” in Montreal. The film was being produced in Montreal because of the film tax incentives there, and because it could double as a European city. During prep Bruce Willis decided to let the location BE Montreal, with French accents, Canadian money, and mayonnaise on a hamburger – it was not only produced more inexpensively, but the film went on to gross $106 Million worldwide. It’s an example of boosting the local culture while still making profits – and please take note – the film would not have been produced there without a film tax incentive.
Yes, the hard facts are that a State usually gets about 8% of the employees tax, plus 8% of the cast and non-local crew, then the State pays 25% tax incentives to the production company. However, there is also an infusion of millions of dollars into the local economy for purchases, rentals and facilities that would not otherwise be there. The win that tips the scales is the spirit of winning that is granted to the local culture.
If you want to find out more about developing your film, the skills of a film accountant, or just interested in the business of media, visit http://www.filmaccounting.com/filmbusiness.htm .
Cheers / John