from: Deadline.com –
The Southern California Association of Governments has weighed in on the local economic impact of California’s Film and Television Tax Credit Program and made a few suggestions about how state lawmakers could tweak it. The annual study by the Los Angeles County Economic Development Corporation notably makes a case for raising the $75 million budget cap for productions to be eligible for tax credits and suggests that VFX work gets a share of the credits pie. The 22-page report (read it here) suggests that rather than limiting the overall production budget, the program instead could “allow qualifying expenditures up to a given cap (such as $75 million).” It notes that big-budget productions might see that as enough incentive to film in California while providing the program “a level of certainty.” The report also makes a case for helping the struggling local VFX community, noting that “California is only of only a handful of locations that does not subsidy programs specifically targeting visual effects. As a result, even California-based companies are opening offices in Canada, the United Kingdom and Asia to qualify for tax incentives.” Calling VFX a “lucrative business with a high-skilled, highly technical workforce, the study said “the threat to the industry’s long-term survival in California is real” and urged state lawmakers to consider a provision to allow access to tax credits.
Outlining the economic impact of the tax credit program, which took effect in 2009, the report said that for every $1 of tax credit issued, total economic activity in the state increased by $19.12, labor income increased by $7.15, Gross State Product increased by $9.48 and $1.11 was returned to local and state governments.