Will California’s Sweeter Tax Credit Program Lure Productions to Stay in the State?

Will California’s Sweeter Tax Credit Program Lure Productions to Stay in the State?

from: Dave McNary, Variety.com

As most California-based producers already know, the state’s film and TV tax credit program has gotten sweeter. The size of its subsidies has more than tripled (to $330 million annually), and extends to types of projects that were formerly ineligible.

Some key dates are looming. On April 1, 2015, the final lottery for independent projects will take place, ending the chancy system that many filmmakers disliked due to its uncertainty. From May 11-17, TV projects may apply under the new program, which replaces the lottery with a ranking system based on job generation. During the summer, feature films may also apply.

“There are obviously going to be more projects shooting in California once the new program starts,” says “American Sniper” producer Rob Lorenz. “It was very helpful for us to get the credit for ‘American Sniper,’ but the old lottery program was not something you could rely on.”

“Sniper” wound up with a $6.8 million tax credit from the California Film Commission last year for $54 million in qualified expenditures. It was a rare instance of a feature film receiving such a credit; most of the previous allocations, capped at just $100 million annually, went to continuing TV series. “Sniper” got lucky after some lottery-selected projects failed to start production by the deadline.

Paul Audley, president of permitting agency FilmL.A., says interest has risen. “We had seven meetings at Sundance where people said they were going to shoot in L.A. specifically because of the change in the program,” he said.

With the start of the commission’s application period for the expanded program next month, 40% of allocations will go to new TV dramas, movies of the week, miniseries, and recurring TV series; 35% will go to features; 20% will go to relocating TV series; and 5% will go to independent features.

I think the expansion is fantastic,” says “Sniper” producer Andrew Lazar. “I’ve budgeted so many films where you’d shoot five days in California and the rest outside of the state because you were chasing the incentive money. I’ve seen so many people who have had to move to Atlanta and Louisiana because the incentives are better.”

Lazar said all but 11 days of “Sniper,” distributed by Warner Bros., were shot in California, including a gun range and beaches in Malibu, Long Beach and San Diego, as well as at the Blue Cloud Movie Ranch in Santa Clarita and an abandoned milk factory in El Centro, which substituted for Sadr City and Fallujah in Iraq. The other days shot in Morocco.

Only three of the eight films up for Oscars this year — “Sniper,” “Nightcrawler” and “Whiplash” — were shot in California (“Whiplash” did not receive a credit).

David Lancaster, a producer on the latter two films, who testified on the program’s behalf at the state capital, notes that independent features will see their annual allocation rise from $10 million to $16 million.

“These are not big-budget films; they’re not financeable without incentives.” he says. “ And it’s hard to imagine them not being shot in Los Angeles.”

As for bigger films, Steve Dayan, chairman of the California Film Commission, is optimistic. Dayan, who’s also secretary-treasurer of Local 399, the Teamsters union, told Variety that the incentive is already persuading some producers to stay in California. “We’re starting to see it in tentpole movies and one-hour dramas,” he says.

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