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Where’s the beef in Colorado production incentives?Welcome to CFVA’s new Production Incentive Web Page Over the next year, CFVA is committed to educating and soliciting input from its membership about the practical, economic and political realities surrounding production incentives. Our current incentive package of $600,000 is a start but is not nearly attractive enough to entice large scale production in Colorado. Greater incentives will help to create a strong and healthy production industry, generate revenue for the State of Colorado, and be a real boon to local economies. WE ENVISION this Web Page as a place where Colorado film and video professional can come to GET INFORMATION, POST INFORMATION, EXPRESS THEIR VIEWS and TALK WITH OTHER PROFESSIONALS and track the progress made by the CFVA working in cooperation with the CFC. JOIN THE DISCUSSION HELP US DESIGN THIS PAGE SOME TOPICS WE’RE THINKING ABOUT: What are Production Incentives? Which states have them? How do they work? Colorado’s unique situation – TABOR News from the Colorado Film Commission How other states have succeeded How to contact your local legislator Upcoming events, votes and meetings Guest editorials
CFC Task ForceThe Colorado Film Commission’s Task Force for Production Incentives has convened a couple of times now and things are well under way. The CFC is confident that they will have a finished product to submit to the Legislature in December, in time for the next session of the State Legislature which will take place in January. The Bill can be introduced as early as mid-January for it to go into committee. The process is a lengthy one for a bill to be enacted. It is first read across the House Floor. Then it must get approved in the House Finance Committee, then it needs to be approved in the House Appropriations Committee. Back it travels to the House Floor for a 2nd reading. Then onto a 3rd reading for a formal vote. Once approved, it travels to the Senate and goes through the same type of process. When approved in the Senate, it goes to the Governor for final approval. –The Colorado Film Commission has requested supportive assistance from the CFVA Membership regarding the 2009 Incentive Program (Performance Based Tax Credits for the Film Industry.) The most important action is to contact the Governor’s Office directly. Contact the Governor’s Office today at 303.866.2471 When you call, you will speak to the Governor’s receptionist. Be brief and simply state: “I am calling to ask the Governor to support Performance Based Tax Credits for the Film Industry” The receptionist will make a note and pass along your wishes. That’s it! For this bill to pass, it must be on the Governor’s RADAR so please call in and let the Governor’s office know that Colorado needs production incentives to maintain a healthy, productive and prosperous film community. Many people had questions regarding what exactly are Tax Incentives and how they work. Below is a list of general definitions (extracted from the eBulletin) which should help to answer some of your questions. Whatever questions you have, please email us at General Definitions Film Production Incentive Program—A government program that provides a financial incentive to a production company to encourage the production of motion pictures, episodic television, documentaries, music videos, national spots, or national print advertising within its jurisdiction. States and countries fund these programs to encourage economic development, create jobs and gain visibility. The programs generally use tax credits or direct payments to provide the incentive. Tax Credit—A credit against future taxes owed to the state. The production company would receive a tax credit based on a percentage of qualified in-state expenditures for the production. In order for the production company to benefit from the tax credit, it must owe taxes. Transferable Tax Credit—Generally, this is a tax credit that can be sold, assigned, exchanged, conveyed or otherwise transferred in whole or in part. This approach gives a production company much more financial flexibility because it can sell its tax credit for cash to another company or individual with a tax liability in the particular state involved. A number of states use this approach because outside production companies often do not have a high enough state tax bill to take full advantage of a production tax credit. The production company can discount the tax credit and sell it to a company that does owe taxes. A broker that specializes in tax credit transfers usually handles this sale. Most states impose a time limit during which the tax credit must be used. In some cases, if the production is solid and approved by the state, the production company can get its funds from a broker before the production begins. Rebate—A direct cash payment to the production company based on a percentage of qualified expenditures for an in-state film production. This is paid out after the production is completed and the books are closed. This is the system currently in use in Colorado. Motion Picture Production Company, or Production Company—Any person or business entity primarily engaged in the business of producing motion pictures. Some states require local business addresses and bank accounts. Qualified Expenditures—Film production incentives are generally based upon a group of expenditures made by a production company in connection with the types of productions covered by the incentive program. The expenditures must be directly related to the production and be incurred within the state. They should be reasonable, ordinary and cannot exceed fair market value. Non-Qualified Expenditures—These are expenses that a production company might incur but are not directly tied to the in-state production effort. They include such items as costs related to acquiring or using the tax credit, marketing and distribution, production financing, depreciation, amortization, or funds reimbursed later to lower production costs, such as advertising placement fees. Completion Bond—A written contract issued by an insurance company guarantying to the financiers of the project that it will be completed according to the terms of the preapproved application submitted by the production company in its application. Some states require bonds. Motion Picture—A single medium or multimedia program, including a commercial advertisement, television series or music video that is created by production activities conducted in whole or in part in the state, can be viewed or reproduced, and is intended for commercial distribution or licensing in the delivery medium used. Many states do not include advertising in their incentive program. Television Series—A group of productions created or adapted for television broadcast with a common series title, related to each other in subject or theme, which is produced seasonally for appearing at scheduled intervals, but subject to discretionary programming and scheduling decisions, and with or without a predetermined number of episodes. This can include a pilot production for the promotion or introduction of a television series. Music Video—A filmed or videotaped rendition of a song or songs portraying musicians performing the song or other visual images set to the lyrics of the song. Ineligible Productions—This generally includes news, weather, or current events programming, game shows, talk shows, sporting events, award shows; a production produced primarily for internal use for industrial, corporate, or institutional purposes; an advertisement, infomercial, or any other production that solicits funds; a political advertisement; or a production that is determined by the state to be pornographic or not in the best interests of the state; and, in some states, commercials. Colorado Definitions Film—Any visual or audiovisual work that contains a series of related images fixed on photographic film, videotape, computer disc, laser disc, or a similar delivery medium from which it can be viewed or reproduced. It must be shown in theaters, licensed for television (or cable) broadcasting, or licensed for the home viewing market. Production Activities—The shooting of a film, support activities related to such shooting, and activities before or after the shoot that are necessary to produce a finished film Production Company—A person, including a corporation or other business entity, which engages in production activities for the purpose of producing all or any portion of a film in Colorado. Qualified Local Expenditure—A payment made by a production company in the state to a Colorado business in connection with the production of a film being produced in the state. Qualified Payroll Expenditure—An expenditure made by a production company to pay the salaries of actors, management, and crew who participate in the film production activities and are Colorado residents. | |||||||||
