The Big 3-0 & Tax Credit Implementation Woes

I've been so swamped trying to help get Hawaii's new 15-20% refundable production tax credit passed and implemented (btw, application forms are forthcoming, like, tomorrow or early next week very soon (sorry!)), I haven't been keeping up with what's going on in the rest of the country. But boy, have production tax credits reached a tipping point, or what?! Check out the latest on what's going on in other states:

• Connecticut: As of July 1st this year, CT's got a huge, whopping 30% transferable investment tax credit, and the minimum expenditure requirement is a measly $50K. This is officially the most generous investment tax credit offered by any state. However, there are apparently already some problems with implementation. The CT film office staff is apparently slow to answer producers' specific questions about which costs qualify for the credit because they quite simply don't know the answers themselves. As it turns out, some costs that were previously thought to qualify are actually not eligible for the credit--such as a major star's salary (only the amount up to double SAG scale is qualified). By the way, here in Hawaii, because the Hawaii portion of a major star's salary is subject to Hawaii income tax, that portion would qualify for our 15-20% refundable tax credit, no matter the amount.
• North Carolina: Turns out that the 15% refundable tax credit that went into effect last year is not actually 15%. This is because to get the credit, production companies must pay NC's 6.9% income tax, which waters down the tax credit to just 8%. As a result of this little glitch, for the first time in years, not a single TV pilot was shot at studios in Wilmington. Incidentally, here in Hawaii, visiting production co's are not subject to state income tax--you do not need to have Hawaii income tax liability to qualify for our 15-20% refundable production tax credit.
• New York: Just this past Tuesday, Mayor Mike Bloomberg just signed a bill to re-up NYC's 5% refundable tax credit through 2011 to complement a similar move made earlier by NY state for its 10% credit. City and state have also each raised their annual credit caps to $30M and $60M per year, respectively. Credits are still first-come, first-served, though, and have various requirements as to the % of total filming done in NYC, on a soundstage, etc. By the way, Hawaii does not have an overall cap on its 15-20% refundable tax credit--just an $8 million cap per qualified production (a "qualified production" is specifically defined in the statute).
• Massachussetts: A 20% tax credit on labor costs that went into effect in January this year isn't generating as much production business as people thought it would. The lackluster result is attributable, they say, to the fact that there is no MA film office (it shut down in 2002 due to budget cuts). However, the MA legislature recently approved a budget that would double the size of the MA Sports & Entertainment Commission and create a new new division specifically charged with generating movie business. If you're reading this, then you know that Hawaii has a film office (we've had one since 1978). Our office is charged with administering and marketing the new 15-20% tax credit, as well as being the central coordinator for all state shooting permits. We also help with finding locations and production resources, and are a generally friendly bunch.
• Tennessee, Iowa, Indiana, others?: These are just some of the latest wannabe states for film tax incentives. So everybody wants to be a film town, huh? Wonder if states will get wise to this and turn their tax credit attentions to other worthy industries...

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