Crowdfunding For Film Production

Image From Studiobinder

My tax accountant sent me a year end information circular of general information. One section of the circular referred to a Crowdfunding IRS letter #2016-0036 that is still the last word in Crowdfunding. There were two quotes in the letter that I thought were well worth highlighting for anyone trying to crowd fund, and yet still stay clear of the IRS insisting that the funds are taxable in your hands. Note this article is not professional advice – please consult a professional accountant before relying on this article.

Here is the first quote from the IRS Crowdfunding Letter:

“What that means is that crowdfunding revenues generally are includible in income if they are not

1) loans that must be repaid,

2) capital contributed to an entity in exchange GENIN-105817-16 2 for an equity interest in the entity, or

 3) gifts made out of detached generosity and without any “quid pro quo.” However, a voluntary transfer without a “quid pro quo” is not necessarily a gift for federal income tax purposes.

In addition, crowdfunding revenues must generally be included in income to the extent they are received for services rendered or are gains from the sale of property.”

LOANS TO BE REPAID

It the funds received is a loan, ensure that you have a written agreement stating the terms of the loan and an unequivocal repayment date.

CAPITAL CONTRIBUTION

If it’s a ‘’capital contribution” make it clear that the money contributed buys a proportion of all common (voting) shares in the company – I remember at least one producer who said that 50% of the shares were for investors and the other 50% belonged to the producer. If you want to involve a lawyer, you can create different types of non-voting “Preferred Shares”; however, if you’re trying to put your money into the picture, just keep it as proportional common shares. If you want, you can buy official blank common share certificates at Staples for very little money. Just fill-out the certificates and send it to your contributors.

GIFTS

Say your great aunt Martha gives you a gift of money to help you make your film, with no other thought of payback in money or in kind. That is not taxable as revenue if it’s less than $15,000. Assuming that your company is not a registered charitable corporation, gifts in excess of $15,000 from each source are taxable to you, and your great aunt Martha is expected to issue you a 1099.

CROWDFUNDING MUST GENERALLY BE INCLUDED IN INCOME, UNLESS …

Take note of the final sentence in bold above – it is nailing down tight the concept that the IRS considers all other funding as income, and thus taxable. This fact brings me to my next quote i wanted to highlight in the a Crowd Funding IRS letter #2016-0036, “The regulation further provides that income is not constructively received if the taxpayer’s control of its receipt is subject to substantial limitations or restrictions. However, a self-imposed restriction on the availability of income does not legally defer recognition of that income.”

Interpreted, it means that in order to avoid having the funds taxed as revenue in your hands, even under any of the three conditions above, you will need to have a caveat in all agreements that clearly indicates substantial limitations or restrictions on the control of the funds – and, it can’t just be self-imposed restrictions. Check with Studiobinder or other crowdfunding institutions on the best way to do that.

NON-ACCREDITED INVESTOR

Finally, to stay within the government regulations you need to be familiar with the term “Non-Accredited Investor”. An “Accredited Investor” is someone who makes more than $100,00 per year, or who has net worth greater than $100,000. If your contributor is not an “accredited investor” then that contributor is limited to investing the greater of $2,000 or 5% of their annual income or net worth.  If you are lucky enough to find Accredited Investors, they may invest up to 10% of their income or net worth, whichever is less, up to a total limit of $100,000. I’m really not sure how closely this regulation is policed; however, I’m throwing it out there as something to look out for.

This article is not professional advice – it is opening the door to further study for all you crowd-funders. Please consult a professional accountant before relying on this article.

Cheers / John

 

 

Film Accounting and Production – Degrees Not A Factor

The profession of Film Accounting is arguably the last accounting profession on Earth, where you can earn a 6 figure annual income, WITHOUT a degree of any kind – however an apprenticeship of 2 to 5 years is common.

NO ONE CARES ABOUT YOUR EDUCATION

Sorry, I know you may have a 6 figure debt as a result of your university degree, but truly – you don’t need a degree to work in film production or in film accounting. I have had marines trained in defusing explosives, television script writers, bookkeepers, CPA’s, office production assistants, film school students, etc all attend my workshops and enter the field of film and television production accounting successfully.

WHAT PATH CAN YOU TAKE TO GET INTO THE BUSINESS?

Film production people are a breed that believe in getting a valuable final product at any cost in a defined unit of time – and, they don’t see that kind of attitude coming out of colleges; at least, not in a large percentage of cases. Most film people truly believe that if you can’t walk into the job and DO it (without too many mistakes), then you’re not going to make it and they’ll let you go and try someone else.

HOW TO PUT YOUR BEST FOOT FORWARD?

The best way to break into the business is to find out the terms used, the basic practices, who to contact, what are the fundamentals required of a new employee etc. Once you have 2 or 3 productions under your belt, you’ll be in demand and will be able find work quite easily. I have several testimonials of people who have made it into film accounting or film payroll after taking one, or more, of my workshops.

PRACTICAL TRAINING

About 2008 I developed a successful training agenda in film accounting, film budgeting, managing film production cost reports, etc. Have a look at my courses on http://www.filmaccounting.com for my upcoming workshops in Atlanta.  Click here to see the agenda, testimonials, and more.

 

Best/John

The Film Industry and the CPA, Professional Bookkeepers

FILM ACCOUNTING PRACTICES

Film Accounting principles and practices are basically the same throughout the film production industry internationally. None of it is brain surgery, but the rapidity of the life cycle is unique, as are the industry terms and practices. As an example of the rapidity of the of the production cycle, here is a typical Indie feature film cycle – in a few weeks/months you start with nothing, open a bank account, find a studio, order furniture, hire crew and cast, buy/rent everything, finish shooting, sell/return everything, pay off whatever, close bank accounts, turn off the light – the door slams on the back of the last man/woman standing – the film accountant. A FULL understanding of the film accounting system is vital to external auditors who need to move quickly to balance their chargeable hours to a competitive field.

BOOKKEEPING-REPORTING-AUDITING

Throughout the Film Accounting process, the multiple details of bookkeeping, reporting and internal auditing (ensuring that the transactions are legal and ethical), can get a little overwhelming, especially if you’re not ready. You would normally have 3 or 4 weeks before the shooting starts, to go from an empty room to a fully functioning office, you need to have a system that is drilled to the level of habitual. The Producers and Financiers expect (actually, DEMAND) that the cost reports are issued timely (the Weekly Cost Report compares every line item in the budget against current Estimated Final Cost, and all variances accounted for). There are a number of ‘tricks-of-the-trade’ in managing that report; remember, it goes to all bosses everywhere.

ACCOUNTING SOFTWARE USED IN NORTH AMERICA

Back in the mid-1980’s, when “Personal Computers” were just getting a foothold, a payroll service company, Entertainment Partners, got the idea to create their own proprietary general ledger software tailored to the film industry. It became the standard general ledger structure. Thereafter, other payroll services followed suit, creating their own proprietary software with the same structure. We use that type of proprietary software in our workshops. In all cases, the payroll services will only grant a license to use their software if you use their payroll service  – so without workshops like mine no one can really learn the general ledger software without apprenticing under a film production accountant in an actual film or television production.

FILM ACCOUNTANT’S PRODUCT

The film accountant’s Boss is the Financier(s). That would include the funders as well as lenders, and the Completion Bond company. It’s a little difficult sometimes, because the Producers are in direct communication with the Film Accountant and technically have the right to fire him/her. I could tell you stories – actually, I do tell you real stories how to handle that situation if it gets noisy. The Weekly Cost Report, more than anything else, is the ‘product’ of the Film Accounting Department. If all systems are ‘in’, the result is a meaningful Cost Report that the Producers and Financiers take to heart – the bond company has the right to take over the production and their most used document is the weekly cost report. Getting familiar with these terms, reports and software is a matter of a fun weekend workshop.

SOME SUGGESTIONS FOR CPA’S

CPA’s who want to service the film industry as auditors in some way have several routes:

• prepare an opinion of the Estimated Tax Incentives from the Film Budget (Required for bank loans)
• prepare audited statements of the Cost Report in post-production for the State Tax Incentives,
• service the administration of the tax credit with the State for the Production,
• claw through the interim costs to see if the Estimated Tax credits are in-line, etc.

Or … work as a Film Accountant somewhere within the Film Industry (if not in production, then with the studios).

SOME SUGGESTIONS FOR PROFESSIONAL BOOKKEEPERS

• After the big wave of activity generated from the shooting of the film or television production there is a time period referred to as “Post-Production”. The accounting workload is substantially reduced; however, weekly payroll for the editors, weekly payment of invoices and weekly cost reports for the financiers are still required. This stage of accounting is referred to as Post-Production Accounting. The work can last anywhere from a few weeks to several months.
• Because of the personal interaction with Producers and crew, spin-off work is always possible, such as Income Tax preparation for producers, cast and crew.

For more info on the upcoming workshops, testimonials, CPE and videos see my web site.

Cheers / John

The Purpose and Product of Film Accounting

(NY CPE Licensed Sponsor – CPE 14 Hrs)

PURPOSE and PRODUCT of FILM ACCOUNTING

The Purpose of Film Accounting is to help the producers create the best feature film, or television series, that is possible for the money invested. This would be considered by some to be the “Overall Goal”.

The Product of Film Accounting is the “Weekly Production Cost Report” – the financial report card, letting the producers, and investors, know if we are progressing on time and on budget.

REPORTING TO FILM & TV PRODUCERS AND INVESTORS

Whenever you have multiple creative people planning and spending their budgets through short periods of time, there are bound to be tempers flaring and cross currents happening among powerful leaders in the industry. All through that chaos and flared tempers, the Film Accounting Team must predict and report succinctly the financial status to the producers & investors.

CAREER AS A FILM PRODUCTION ACCOUNTANT

Film Production Accounting is the last accounting career of stature, earning very good income, where a CPA Is not a prerequisite. The career usually starts at the bottom of the Accounting Department, where you work your way up through 3 levels to being the “Key” Film Production Accountant. The keener you are, the faster you rise through the levels.

HOW TO GET IN THE INDUSTRY

Get some experience and familiarity with the tools of the trade. Where do you find out about work? What are the skill sets required? Is there a specific general ledger software you need to know more about? All of these questions are answered and practiced in my Film Accounting 101 workshop in NYC, September 15^th and 16^th, 2018. Come join us in the heart of Times Square at 1441 Broadway Ave for a weekend of learning and sharing.

ABOUT THE WORKSHOP

This is a weekend of practicing the “film studio standards” of film production accounting. You work with all the usual tools, such as a real film budget, cost reports and hot costs, and the commonly used proprietary general ledger software used in the Film Industry. From all the testimonials over the past 6 years, the workshop is fun, effective and has started many careers in the industry.

There are more benefits to doing the workshop. Check them out at http://www.filmaccounting.com

I’m on a production in NYC for 6 months.  I’m rarely in this city. We have a group of professionals attending and have room for a few more.  I hope to see you there

Cheers / John

 

John Gaskin is a New York licensed CPE sponsor.

Why A WGA Strike Cannot Be Supported

Film Production

Howard Rodman, a WGA board member during the last strike, and now the elected president of the WGA West, is recorded in Deadline Hollywood as saying, “This is an era where the companies are doing astonishingly well – the companies’ profits have doubled in the last decade, now approaching $50 billion a year. So much of that profit originates with our work. The companies forget that.”

WGA HALF-TRUTH RHETORIC

Not true. The half-truth rhetoric from the WGA is equivalent to the Trump administration saying that there isn’t any need to address climate change. It’s a regressive attitude of a small self-interest group at the expense of the 423,000 people who are affected by a WGA strike (see the May 2016 Bureau of Statistics reference in my last blog).

“COMPANIES” ARE THE ENEMY FOR BORROWING BILLIONS

This WGA rhetoric attempts to make “companies” the enemy. Those are the same companies who are taking great risks, borrowing, and paying out billions, to create content and employ more television writers, actors and crew than have ever been employed before in the history of the industry!

Let’s take Netflix, for example. It is now in debt to the tune of $3Billion in order to create content. And that debt makes it possible to hire a record number of television writers who would otherwise be unemployed. Now before you say, “Yeah, but what about all their profits!” let’s follow the money, i.e. the cash money.

ARE THOSE SAME COMPANIES ACHIEVING CASH FLOW PROFITS?

Market Watch has this really cool chart which shows that Netflix has had a negative free cash flow for the last three years – Netflix is spending more cash than it’s getting in, in spite of huge borrowings! The mystery of accounting techniques is that, yes, it can appear that there are profits when the cash flow sucks, big time.

Let’s hope that Netflix, and the other “companies” targeted by the WGA, do reach the point of making cash profits – lots and lots of profits, so that we can all work in this great industry.

THE WGA PENSION PLANS

The final bit of rhetoric that makes my teeth grind is the complaint about the WGA’s pension plan. Apparently it will be depleted in another 3 years. When I asked a director friend of mine if the DGA suffered the same malady, he scoffed. The DGA pension is very strong! Why, I asked, would the DGA pension be strong and the WGA pension broke, when they each get an equivalent amount of funding from the producers? The only answer we could come up with is Bad Management. The WGA misused their pension funds, now want to strike for more. For those of you with children, does that sound familiar?

LEST WE FORGET – THE DIRGE OF 2007

During the 2007 strike the Milken Institute said, “The 2007 Hollywood writers’ strike dealt a blow to California’s already struggling economy and is expected to result in a loss of 37,700 jobs and $2.1 billion in lost output through the end of 2008”.

In summary,

• The WGA writers are not the Davey Crockett’s at the Alamo. More television writers are working now than ever in the history of television.
• The WGA records show that in 2015 TV writers earned an average annual income of $194,478. That, apparently, is not enough.
• A WGA strike will cause significant harm to the industry.
• The least we can do is protest.

 

Please sign the petition and pass it on to any group, or any person, that you know:

 

PETITION: I do not support a 2017 WGA strike.

 

Cheers / John

 

See my web site for current workshops on Film Accounting 101 and Film Payroll , CPE qualified http://www.filmaccounting.com

 

Why Another Writer’s Strike Is Unsupportable

How did one of the richest and best paid guilds come to the brink of a strike? Deadline Hollywood has an excellent summary of the WGA leader’s rhetoric, starting with Sept 21/15 right through to April 10.17. It’s my purpose to present some of their rhetoric and to refute it with real facts and figures.

99.2% OF THOSE WORKING IN THE INDUSTRY WOULD BE HIT

First of all, let’s look to see how many writers are involved, and compare that to the number of other people will be affected by a WGA strike. In May of 2016, the Bureau of Labor Statistics published that 422,560 people were employed within the “Motion Picture and Video Industries”. Out of the 422,560 people, only 3,460 people are classified as “Writers and Authors”. To make a point, that is only 0.8% of the total number of people employed within the industry were Writers at the time of that survey, leaving 99.2% of the industry severely impacted. Hmmmm. Without getting into anything else, I think that those numbers tell you something, especially when compared to a writer’s average annual salaries – see further below.

RHETORIC – AVERAGE WRITER’S INCOME HAS GONE DOWN

The rhetoric raised by the WGA to support a strike bid leaves me scratching my head. Per Deadline Hollywood, the WGA Reps are saying, “During this ‘peak TV’ era, when more television is being produced than ever, and when everyone who works in television is finding a sellers’ market for their skills, why is the average TV writer seeing their income go down?” This seems astonishing! How could the average salaries go down?

COMPARING 23 EPISODES WITH 13 EPISODES

Well, in the “old days” the TV writers were working generally, on 22 or 23 episodes a season – not always, mind you, but generally speaking. These days the trend is toward producing 13 episodes a season – this is the new formula supported by streaming services and the various Cable television programs. So, yes, a writer who worked on 23 episodes would make more than someone who worked on 13 episodes – Duh! The elephant in the room is: How many more writers are actually making a living now as compared to them good ‘ol days? Well, the answer is a lot more.

COMPARING 2009 WITH 2015

To give you an idea of how very few active television writers there were in 2009, here is what Charles B. Slocum (Asst Exec Dir of WGA West) said in Aug/Sept 2009, “In 24 hours, NBC has just three hours of dramas and comedies. And, on some nights those make way for Dateline or Deal No Deal.” So, it’s a fair conclusion that very few writers indeed were working in those good ‘ol days.

Here is a comparative statistic from Deadline Hollywood going back to 2015 when the streaming companies (HBO, Netflix, Starz, Amazon) just started to hit their stride: “The guild’s records also show that in 2015, TV writers earned $803 million under the WGA West’s basic contract, for an average annual income of $194,478, which was $48,936 more than they made in 2006.” Are we to support the writers because “the average tv writer has seen their average income go down?”

DO YOU DISAGREE WITH A WGA STRIKE?

I have more tables to support the writers fees, including their residuals, all based on their WGA 2014-2017 Theatrical and Television Agreement. However, I think you get the point – another writer’s strike is unsupportable. You can have a look at their “Schedule of Minimums” published on their web site.

Should I start a petition? If it won’t stop a strike, at least the WGA will know how the majority feels. Let me know how you feel.

 

Cheers / John

 

See my web site for current workshops on Film Accounting 101 and Film Payroll , CPE qualified http://www.filmaccounting.com

 

 

 

Film Production Payroll Accountant

Film Payroll accountants are a category that is never heard about outside of the film industry. A Film Payroll Accountant with a couple of years experience usually makes in the range of$2,000/Week. What does a Film Payroll Accountant need to know and how much demand is there for their services?

A PUBLISHED “WANTED AD’s” FOR FILM ACCOUNTANTS

There is one source that many studios, producers and production accountants use to find available film accountants, including film payroll accountants. It’s referred to as “Emily’s List”. Those who post there are Producers looking for various levels of film accountants to work across America, and even up into Canada. The internet address for Emily’s List is at http://www.ricegortonpictures.com/blog/

ALMOST 40% OF POSTS ARE FOR PAYROLL ACCOUNTANTS

I went through the last 100 listings or so, to see how many postings were for Payroll Accountants. I found that 4 out of 10 listings are for either a Film Payroll Accountant, or for a Film Payroll Clerk. That makes the other 6 out of 10 listings shared by Key Accountants, 1^st Assistant Accountants, 2^nd Assistant Accountants and File Clerks. Wow…. that proves to me that the Payroll Accountant is in demand.

NOT YOUR USUAL PAYROLL ACCOUNTANT

Film payroll accounting is all about knowing the union rules for cast (Screen Actors Guild), directors and assistant directors (Directors Guild of America), crew (IATSE) and drivers (Teamsters). The skill is derived from knowing how to calculate the “Gross Pay” – that is, the amount of gross pay after factoring in overtime, meal penalties and rest violations. The  government and union withholdings and contributions are calculated and reported/remitted by the payroll service.

PRACTICE, PRACTICE and PRACTICE SOME MORE

So, the task becomes knowing how to calculate union gross payroll, and that’s all we do for 2 full days – right from beginning to end. You will be left with all of the reference material for SAG, DGA, IATSE Area Standards, and IATSE Low Budget Agreement, as well as on-line access to the full courses and materials for future reference. (A Michigan Teamster Agreement is reviewed at the end of the 2nd day; however, after doing the above it seems pretty simple).

The payroll workshop is over the weekend of May 20^th and 21^st, 2017 in Chicago.

Hope to see you there! (Note to all you CPA’s, this is a fun way to earn 16 CPE points!)

For more info you can check out my web site at http://www.filmaccounting.com/filmworkshops6.htm

Cheers / John

Media and Entertainment Market Expected to Reach $771 Billion by 2019

Here’s what SelectUSA.gov.com has to say about the U.S. media and entertainment (M&E) industry:

“The U.S. media and entertainment (M&E) industry is comprised of businesses that produce and distribute motion pictures, television programs and commercials along with streaming content, music and audio recordings, broadcast, radio, book publishing, and video games.  The U.S. M&E market … is expected to reach $771 billion by 2019, up from $632 billion in 2015, according to the 2014 – 2019 Entertainment & Media Outlook by PriceWaterhouseCoopers (PwC).”

WHAT WOULD THAT MEAN FOR YOU?

That should be good news for anyone working on the periphery of the film and TV industry, but it should also be a wake-up call for CPA’s looking to expand their practice. Regardless if you’re interested in Film Production Accounting, or in working as a Line Producer, you’re probably wondering how you would fit into the M&E Industry. If I were you here are some of the immediate questions I would ask:

• What does the Film Accountant do that supports and is parallel with what a Producer needs to know?
• What qualifications does a person need to start working in film accounting? (Answer: surprisingly little)
• What are the industry specific accounting practices, reports and terminology that the film accountant prepares and the Producer must be able to supervise?
• How can an understanding of film accounting help me generate new business from Film Tax Incentives, and help the Producer access funding?
• How would an understanding of film and television production open the door to new business for my CPA practice?
• What level of billing or wages are usual for the film industry?
• What accounting, budgeting and scheduling software is used during a film or television production, how can I get familiar with it?
• How do I find contacts in the film industry?

Do some research. I think you’ll find that there is very little, if any, information available online – and most of what you’ll find is authored by me.

LEARN THROUGH WEEKEND WORKSHOPS – 14 HRS of CPE

Your questions will be answered in a weekend workshop, Film Accounting 101. I have another one coming up on May 6th and 7th in Chicago, IL. Learn by actually doing in a controlled environment. I keep the workshops less than 20 people so that we can have lots of one-on-one time.

 

For more info see http://www.filmaccounting.com

 

Cheers / John

 

 

 

 

 

Are the GOP Creating A Boom in Film/TV Production?

 

Remember when Canada was the first out of the gate with film production tax incentives? The film and television productions were Running Away to “Hollywood North”. Indeed, Canada still holds its own with over a billion dollars a year in crew payrolls alone. Well, this time it’s the GOP tax Reforms, not Incentives, that could cause a trend of Running Back to America, creating a boom of film/TV production.

COST OF FOREIGN PRODUCTION NO LONGER DEDUCTIBLE FOR TAX PURPOSES

If passed, the GOP proposals would no longer allow foreign costs of production to be deductible against domestic revenues. Let’s take an example:

• Ford builds a truck in Canada for $15,000
• Then, Ford imports the same truck to America and sells it for $30,000
• The resulting “Net Profit” of $30,000 – $15,000 = $15,000 would be their current taxable income.
• No longer! Under the proposed business taxation rules Ford will get taxed on the full $30,000 revenue without being allowed to deduct the foreign cost of manufacturing.
• Conversely, say Ford builds the same truck in America for $20,000 ($5,000 more) and sells it for $30,000 then the taxable revenue will only be $30,000 – $20,000 = $10,000
• At a 20% or 25% tax rate Ford is no longer saving money by using cheaper foreign labor.

PRODUCTION COMPLETED IN AMERICA AND SHIPPED ABROAD NOT TAXED

Another major part of the proposal is that all Foreign Revenues earned from American made products and then shipped abroad will not be taxed!   Wow! This is a complete turnabout from current standards. So, that could even help for cars sold in Canada. Let’s take the same example:

• Ford builds a truck in America for $20,000.
• Ford sells the same truck in Canada for $30,000.
• Under current tax rules Ford would pay taxes on the net income of $10,000 less a credit for taxes paid by Ford’s subsidiary in Canada. (The current American Corporate Tax rate is higher than the Canadian tax rate so is usually more tax to pay).
• No longer! Under the proposed business taxation rules Ford will not be taxed at all on the $30,000 earned from Canada.
• So, this encourages American made products to be exported.

IMPACT ON CANADIAN PRODUCTION OF FILM AND TELEVISION

The impact on Canadian film and television production in the short term could be big. Let’s say that the cost of film/TV production in Canada is approximately $1.5Billion per year, conservatively. If none of that could be construed as deductible against revenues earned in Hollywood, I’d say that there would be some worried Studio executives. In the longer run I expect that the US Dollar will get stronger and stronger when compared to the Canadian Dollar. So, less and less of that missing tax deduction will be missed by Hollywood. However, nobody likes to pay taxes, which may cause Studio Executives to produce in America regardless of favorable exchange rates. Indeed, these GOP corporate tax proposals would discourage production anywhere else in the world, not just Canada.

DESTINATION BASED CASH FLOW TAX – (Term Used by Economists)

The buzz word for this corporate tax proposal is Destination Based Cash Flow Tax, or DCFT for short. Economists love eye-glazing terms. They can’t help themselves. I mention it only because you may hear the term and when you do you won’t dismiss it as another Economist’s wet dream. My take on it is that the offshore revenues and the offshore costs of production are eliminated from the corporation’s taxable income. Theoretically, this will help production in America, increase jobs and mess with foreign countries production – which will create a howl of protest from various concerned parties.

EVEN THE WASHINGTON POST LIKES IT

If you’re interested, you can read the source document here. Or, the Washington Post’s review – surprisingly good given that they usually hate anything Republican. Here’s a quote from that article:

“It gets complicated, but the upshot is that the cost of imported supplies would no longer be deductible from taxable income, while all revenue from exports would be. This would be a huge incentive to import less and export more, significant change indeed for an economy deeply dependent on global supply chains, and which routinely runs an overall merchandise trade deficit. Meanwhile, the plan would discourage companies from shifting earnings to subsidiaries in low-tax countries and encourage American and foreign companies to operate within the United States.” Washington Post, Charles Lane, Dec 21/16

WHERE WILL THE “RUN-BACK” PRODUCTION RETURN TO?

It would be cool to see any productions coming from Canada and overseas arrive in California. Also, Ohio and Mississippi both have very good tax incentives and don’t appear to have exhausted their crew-talent pools. The usual other film and television production centers are currently working to capacity, or close to it.

CONCLUSIONS

At the time of writing this blog the proposed Corporate Tax Reforms have not been passed yet; indeed, it hasn’t even been fully fleshed out for debate yet. There are big players opposing it – like the oil barons (think Koch brothers) and the Walmarts and Targets who make huge profits by buying cheap offshore stuff. At any rate it’s worth investigating for yourself and discussing it with your local guilds and unions, both in the USA and in Canada. It has the potential for a boom in film/TV production, as well as all manufactured products – and all thanks to the GOP! Whoda thought?

Cheers / John

References:

The Tax Foundation: June 30/16 http://taxfoundation.org/blog/house-gop-s-destination-based-cash-flow-tax-explained

Forbes: Jan 3/17 http://www.forbes.com/sites/danielmitchell/2017/01/03/concerns-about-theborder-adjustable-tax-plan-from-the-house-gop-part-i/#23da766364ed

Forbes: Dec 8/16 http://www.forbes.com/sites/beltway/2016/12/08/border-adjustability-is-already-fueling-tax-reform-controversy/#46e8220142bb

 

 

 

 

 

Emerging Producers – Overview of the Film Industry

BUSINESS LANGUAGE OF PRODUCING FILMS

Emerging Producers must separate themselves from the crowd as someone who knows the “Business Language” of the investors, Major Studios, Completion Guarantors, Distributors, etc. You can’t be confused with the clutter of people who “have a great idea”, but can’t express their ideas in a business like manner.

The purpose of this article is to help you take a giant step towards your goal as a Producer, and of ultimately financing for your film.

BUSINESS CYCLE

By breaking down the business cycle of film into:

• Development (Investor Confidence),
• Green Light Stage,
• Production Stage,
• Post & Audit Stage and
• The Waterfall

you will be able to more confidently discuss the film and television production business from a business perspective with potential investors and completion guarantors throughout North America.

ONLINE COURSE

This online course takes  about 2 or 3 hours to go through, has 12 videos and a 71 page course content. It also includes a download of a $9Mil professional budget example in pdf format.

See http://www.talkfilm.biz/filmbusiness.htm for more information.

Cheers / John

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John is a working film production accountant who has worked on over 50 film and television productions in 6 countries since 1985. His book, “Walk The Talk”, live workshops and online courses are highly regarded. See http://www.filmaccounting.com for more info.