Among the tax breaks that were extended in the fiscal cliff
legislation adopted by Congress at the 11th hour this week will be ones for TV
and movie producers.
According to the bill language, among the tax breaks being
extended is one for TV and film producers who spend the majority of their
production dollars in the U.S. rather than Canada or other foreign locations.
That could represent up to $430 million in deductions for Hollywood over the
next two years, according to estimates
from Congress' Joint Committee on Taxation.
The tax break was instituted as part of the 2004 American
Jobs Creation Act to try and level the playing field with Canada and stem the
flight of production to other countries that provide incentives, including
their own tax breaks.
and film producers are allowed to deduct production costs up to $15 million
in the year they are paid (up to $20 million if a significant amount is spent
in certain depressed areas, like low-income communities or the Gulf Coast
region) rather than recovering them through depreciation. But they can do so
only if 75% of the production cost is spent in the U.S.
The Motion Picture Association of America, a big backer of
tax incentives both at the state and federal levels, pointed to the economic
benefits that will accrue from continuing the incentive program.
"The film and television industry is a vital component of
the nation's overall economy, has a positive balance of trade with virtually
every country in the world, and has been a significant contributor to growth in
our economy," said MPAA spokesperson Kate Bedingfield. "2.1 million
American workers are employed as a result of the American film and television
industry, and our industry is responsible for $137 billion in total wages to
American workers. A strong American film industry contributes to a strong
The television industry's top news stories, analysis and blogs of the day.
Thank you for signing up to Next TV. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.