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Film, TV Productions Increase In California Due To More Film Tax Credits

California brings more productions back due to $330 million tax credit program

By Evan Symon, November 18, 2020 5:34 pm

On Wednesday, the California Film Commission announced  that several TV shows would be moving production to Southern California following $32.5 million in tax being given to them by the state’s film tax credit program.

The moves of the Amazon series “Hunters” and the Disney+ series “The Right Stuff” are only the latest series to move to California from previous filming locations that also have large tax credits such as New York, Toronto, Georgia, Florida, and the Czech Republic.

The two series announced to be moving on Wednesday are estimated to bring in around 7,000 direct jobs, with thousands more going to post-production work such as special effects and editing.

“It’s really great to emerge from the shutdown with news that two more successful TV series are relocating to California,” said California Film Commission Executive Director Colleen Bell in a statement. “One thing that I do have complete confidence about is that we have in California put together some of the most comprehensive and effective safety protocols for production activity anywhere in the world.”

California Governor Gavin Newsom recently renewed the tax credit program, with California standing to give $330 million more through 2025 to entice productions back to California despite a budget deficit and a pandemic that has been slowing movie and TV productions around the world since March.

“California lost a lot of productions in recent years to Canada, the Southeastern US, and a lot of other places that have been throwing out tax credits,” Los Angeles entertainment lawyer Jeffrey Klein told the Globe. “This is their way of catching up. You also have to remember there are still a large number of studios, production companies, and others businesses associated with the industry around Los Angeles. This helps save them.”

“Plus it really does help put money back into the local economy. When Michigan did tax credits ten years ago, they failed to bring along post production people or  have more local people working all around that, so it hurt them and they wound up losing money. For Los Angeles, which has pretty much everything needed in town, including a wide variety of locations within a few hours drive to save on location costs, many local businesses benefit and it helps the economy. California is doing everything it can right now to stimulate the economy, and bringing more shoots back here is a huge way to do it. California is losing a few businesses right now moving out of state, and honestly, for Southern California, the film industry is picking up some of the slack.”

Tax credits rebound film industry

Since 2015, dozens of productions have moved or moved back to Southern California due to the tax credits, rebounding the industry in Southern California after a half decade of decline.

“The general rule is that every production amount multiplies by three for economic growth,” explained filming accountant Patrice Weiss to the Globe. “So, even if California kicks in, say, $10 million in credits, it’s like tripling their investment in local growth. Pretty much any city around LA knows this. You know, you have a big production. That means rentals, paying for storage, parking, renting a building or building, permits, hiring local talent, catering. It goes down all the way to food trucks parking nearby and  getting a lot of money from those working on the show to local businesses getting windfalls for being part of a production I know for a fact that a lot of Airbnbs are currently renting out to productions at a time when few tourists are coming along.

“A lot of tax money is going into these breaks. But it’s meaning triple that for the local economy, a big amount especially with the economy still trying to recover. It’s important.”

To date, $815 million in tax credit money given since the program started in 2015 has brought in $6 billion into the California economy.

“It’s such a huge economic generator, and one that makes a lot of money for the economy at that,” added Weiss. “It’s hard to say no to something that makes a lot more money off an original investment, and helps save a classic Californian industry to boot. I mean, we have been taking productions away from Canada and Georgia. That hasn’t happened in a long time. And this is one of the few industries still bringing people in to California instead of out.”

The tax breaks, which generally cover around 20% to 25% of a production, are expected to continue until at least 2025. Productions in California are expected to rise next year dependent on COVID-19 restrictions, as tax credits in other states, such as Georgia and Louisiana, have been facing more challenges in recent years.

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