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Oscar-nominated movies already winners thanks to tax credits

March 2, 2014

The Oscars will be handed out tonight, but thanks to state tax credits some movies already are big winners.

Economics21, a Washington, D.C.-based center of the Manhattan Institute for Policy Research, examined the finances of 2014's nine nominees for Best Picture and found that The Wolf of Wall Street takes the top award in the tax subsidy category.

New York's film production credit could end up covering around $30 million of the costs Martin Scorsese ran up making the dark comedy about corporate greed. Irony much?

Movie State Tax Credits for 2014 Oscar Nominees_Economic Policies for the 21st Century

Empire State taxpayers don't support just big name movie stars like Wolf's Leonardo DiCaprio and Matthew McConaughey. The 'Jimmy Fallon' tax credit helped lure The Tonight Show back to the Big Apple.

Worldwide tax dollars for films: Domestically, Louisiana's tax subsidies helped lure makers of two Academy Award-nominated films, 12 Years a Slave and Dallas Buyers Club, to that state.

The Pelican State's tax breaks are the most generous in the United States.

The United Kingdom also helped foot the bill for a couple of this year's honored movies.

Philomena's relatively tiny $5 million budget was well within the $38 million cap on the UK's 25 percent credit for film making expenditures. Gravity's producers, working with a $100 million budget, also took advantage of the country's 20 percent tax credit for their $62 million in costs the cap.

California, which still hosts Hollywood's biggest night, managed to get only one film into the Best Movie category this year. The makers of Her took advantage of the Golden State's 20 percent tax credit to underwrite its $25 million costs.

Expanded credits planned: California used to be the movie-making capital. That has changed dramatically, largely because of tax incentives.

Oscars_statuetteAt one point, more than 40 states and a dozen countries offered production company tax breaks. Most of those are still in effect in some form.

Of the 30 highest budgeted films in 2013, only two conducted primary shooting in California. Television filming also has dropped off within the state; the Los Angeles mayor's office reports that TV production has dropped 39 percent from its 2008 high.

That's why some California lawmakers want to expand the state's $100 million annual film incentive program.

A similar move is under consideration across the pond. The British government wants to increase tax credits for bigger-budget pictures, as well as make changes to benefit the nation's locally produced independent films.

Weighing the worth: These moves to make locales more television and movie-making friendly are bucking a trend that has turned against production tax subsidies.

Abuses of the tax breaks and concerns about states' bottom lines have prompted many jurisdictions to rethink just how star-struck they can afford to be.

And circling back to the greed theme, sometimes the demands of productions companies prompt a rethinking of the tax credits' possible payoffs.

The popular Netflix series House of Cards has delayed filming until mid-June pending the outcome of two separate bills in the Maryland Legislature that would provide lucrative state tax breaks for the political drama. The series producers are threatening to move elsewhere if they don't get more Maryland taxpayer money.

Will Old Line State lawmakers give in to the star-studded blackmail attempt? Or will they be as tough as Kevin Spacey's Frank Underwood character let "House of Cards" relocate rather than spend more taxpayer dollars on the show?

As they say in serialized dramas, stay tuned.

And tune in tonight to see which movie gets a golden statuette to go along with its already gladly accepted taxpayer funding reward.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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