Film tax credit survives California $ woes

July 11, 2009

California's budget crisis has all the elements of a major disaster movie.

Hollywood_sign There's the big-name star politician star, Gov. Arnold Schwarzenegger.

There are the continuing battles, no special effects needed, between Democrats and Republicans in Sacramento.

There's the supporting cast of millions, an electorate that propels the main money story line by voting for projects but against ways to pay for them.

And there's the unbelievable plot twist, a state paying its bills with IOUs.

Now all we need is a studio to green light the project. That shouldn't be too hard to find since, despite all it's money troubles, California has maintained its tax breaks for movies made in the state.

No money, but tax breaks: Yes, it's true. California's film incentive program is alive and well.

On July 1, the Californian Film Commission began accepting applications for the $100 million available to TV an movie producers in this the first year of the program.

According to Commission Director Amy Lemish, as of last week about 60 productions had applied.

Most of the tax break applications are from filmmakers planning independent movies with budgets between $1 million and $10 million. But there also are studio projects with stars applying for the break. (Has anyone checked The Governator's calendar recently?)

So how does a state that's now forced to pay businesses and individual taxpayers with IOUs (officially, they're registered warrants), justify keeping such a large tax break in place?

The IOU issue doesn't affect the California film tax break, according to state officials, because unlike incentives in some states, the Golden State break is not a refundable credit. Production companies can use it only to reduce their tax obligations, or sell it to someone else who can do the same.

The thinking apparently is that while the film companies may not owe much, or any, taxes, the ancillary companies and people that it hires will. Plus, at least those folks will have jobs.

Light, camera, tax break … maybe: Speaking of other states, some are rewriting their TV and movie making tax credits.

In recent years,states around the country have implemented tax breaks to get the productions to shoot within their borders.

But now that budgets are tight, Marketplace radio reports that some critics are raising new questions about the tax strategy.

The radio program, however, might want to do a follow-up story in Iowa. Tax Updates notes that Hollywood is flocking to the Hawkeye State's 50 percent filmmaker subsidy.

Related posts:

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
Tropical Storm Arthur’s deadly arrival underscores need for disaster preparation

June 18, 2026

Tropical Storm Arthur as it moved toward the Texas cost on June 17. Its deadly…

Read More
Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments