The Trump administration has given its support to a proposed federal tax credit that would provide financial incentives for studios to produce movies using resources inside the United States. The specific legislation that would implement this program has yet to be finalized. Because there is bi-partisan support for the initiative, it seems likely that some version will become law.
So now it’s down to the details and various parties are lining up with their priorities. Puck’s Matt Belloni suggests that the key ingredients that will allow the idea to be translated into a law with broad support, and that will have a material impact on preserving current production and re-shoring activities that have migrated outside the U.S.
The most fundamental component will be to give producers a direct tax credit against labor costs, writing off as much as 20% of those expenses on top of the state and local incentives. Labor costs should include both below-the-line (production crews) and above-the-line (actors, directors) resources. It should apply to both scripted and unscripted production, so as to encompass the full range of content being produced for today’s media environment.
Other interesting elements could be an even more generous credit for current productions that are relocated back to the U.S., which would result in a quick and measurable impact on current production in the pipeline. Focus would also have to be paid to streamlining the process and paperwork for studios to apply for the credits, spanning all jurisdictions. You could think of this as a “common app” that standardizes the information required to apply for these credits.
