Film Tax Incentives Okayed

President George Bush last week signed the massive corporate tax-incentive legislation that includes help to fight runaway production in the United States.

On Fri., Oct. 22, Bush signed the American Jobs Creation Act, offering tax breaks for everything from timber to television and film production.

The new law includes provisions for a tax deduction in the current taxable year for the entire cost of certain film and television production expenses, up to $15 million, or $20 million for costs incurred in a low-income community or a distressed county. The law also allows for the amortization of remaining costs over a three-year period.

The law also requires that 75% of services involved in the production be performed in the United States.

The Screen Actors Guild expressed excitement at the bill's passage, noting that the guild had worked hard with others in the entertainment industry to push the legislation through Congress.

SAG President Melissa Gilbert stated, "This collaborative effort will result in more good jobs with benefits, for American workers. Combined with extraordinary state film incentives, we are slowly bringing work back to the United States. We applaud the many legislators who fought for this law, and the Directors Guild of America for leading the charge."

A broad base of entertainment industry organizations has joined SAG and the DGA in the Runaway Production Alliance, which supported the legislation. They include the International Brotherhood of Teamsters, the American Federation of Television and Radio Artists, and the Writers Guild of America. On the management side, such groups as the Motion Picture Association of America and the Association of Independent Commercial Producers were involved. The Association of Talent Agents may have had its struggles with SAG over a franchise agreement, but the two evidently worked together through the alliance on the new law.

"I'm ecstatic! This bill can bring a minimum of 100 films into this country within a year and we'll have work," actress Diane Ladd, who lobbied for two years to ensure that the tax bill included entertainment provisions, told The Hollywood Reporter. "You've got 12 countries out there that are giving huge tax breaks and we didn't have one to compete with."

Ladd singled out the efforts of Rep. Karen McCarthy, D-Mo., in fighting for the entertainment industry's interests as the bill evolved, and members of the nonprofit Arts & Culture Taskforce, of which she is the president, for educating lawmakers and others about runaway production. The task force was not a part of the Runaway Production Alliance.

The federal law could prove a double bonus for New York filmmakers this year. The New York state Legislature this summer approved landmark tax incentives for film and television production that would help fight runaway filmmaking to other areas, particularly Canada. The state filmmaking legislation, which was a part of the budget bill approved by Gov. George Pataki, provides $100 million over four years -- $25 million annually -- to cover tax write-offs for film and TV produced in New York state. The bill also allows New York City to provide as much as $12.5 million in annual tax credits for production in the city.

SAG and AFTRA were mainstays of the state entertainment industry's effort to form the legislation and get it approved.

The Hollywood Reporter's Brooks Boliek contributed to this article.