This website uses cookies to ensure you have the best experience. Learn more

Tax Incentives In The Film Industry

2250 words - 9 pages

While in the process of making a film, the financing largely determines the outcome of a production. With a small budget, a producer is limited to locations and assets. Good producers manage to take advantage of money saving opportunity programs while working on small budget project to help stretch out there budget. For example, Neill Blomkamp and Peter Jackson were director and producer of the film District 9. With only $30 million, an incredibly small amount for a feature film, Blomkamp and Jackson took advantage of local tax incentive programs, these programs lowered taxes on purchases and rentals. By doing this it gave Blomkamp more freedom to extend his budget. Recently, the United States has adopted tax incentives to encourage growth in the film industry however; there is controversy over whether or not these incentives are as effective as they appear. This raises the question: Should tax incentives be used as a method to encourage the production of films?
Tax incentives, a term that encompasses many types of tax systems, focus on encouraging economic growth by lowering or, in some cases, completely removing the tax on purchases by a film production. Specifically, tax incentives that deal with encouraging the film industry are known as Movie Production Incentives. These can be subdivided into five basic categories that are tax credits, cash rebates, grants, sales tax exemption, and fee-free locations, which have relatively similar definitions. Tax credits are the simplest, which deduct a portion or percentage of the tax from a purchase. For example, if a production needs 10 widgets at $10,000 each with a tax of 20 percent, the final cost adds up to be $100,000 plus $20,000 in tax totaling at $120,000. If a state government offers a 75 percent tax credit on widgets, this means that the tax is reduced from $20,000 to $5,000. By taking advantage of an existing MPI, the film production saved $15,000 on widgets. The other four categories work in the same way, except that the tax system is more specific. Rebates are the same as tax credits, except that it occurs instantly with the purchase. Sales tax exemption is self-explanatory and fee-free locations allow filmmakers to use state owned property without charge. Finally, grants are money given by the government to a film production (Luther, 2010). Throughout this paper, all of these terms, with the occasional exception of tax credits, will be referred to as MPI’s.
Since these incentives have started to appear, competition is common among states that compete over productions. The presence of a film production encourages economic growth in local areas and the state as a whole. Starting in 1992, Louisiana was the first state to adopt MPI legislation. Since then, forty-five states have responded with similar programs (Luther, 2010). Filmmakers fuel the success of these programs because they seek locations that are less expensive than California and New York. The cost of hosting a production in...

Find Another Essay On Tax Incentives in the Film Industry

My Start in the Film Industry

772 words - 4 pages some day.” I understood that I enjoyed creating projects, but I did not understand the premise of being a producer. I went to college and studied multi-media production. I attended Oral Roberts University (ORU) and I studied television, web, video, film, and audio production in the classroom. I also had real world experience through internships. I worked a summer internship at PBS/WNET13 for two award winning TV shows in the local Television

The American Film Industry Essay

3489 words - 14 pages The American Film Industry Why is the Film Industry one of the largest and fastest growing industries in the world? Simple. People like entertainment. Movies are entertainment. Movies are like books, only they're visual. People like seeing other people cast in roles, and playing out a story. Why not turn to plays instead, you ask? Movies give people the actors and the stories, along with background music, special effects, and overall

Proposed Options for Solving the Foreclosure Crisis through Public Awareness and Tax Break Incentives

1040 words - 4 pages Foreclosures are a major problem, epically in today’s bad Housing Market, however with ever problem there come solutions. There is nothing we can’t fix. Fixing these problems with feasible solutions is what we must do. Currently the Obama administration is give tax break incentives from first time home buyers and its WORKING! The housing market has made a very remarkable recover from just one year ago, but as great as these tax break incentives

Genger Inequality in the Film Industry - Michigan State University - Essay

941 words - 4 pages Jones 4 Maddie Jones Professor Byron Intro to Women’s Studies 10 December 2017 Inequality in the Film Industry In a time when people think women are making advancements in the film industry, the opposite is actually taking place and things are getting worse, not better, for women in Hollywood. By shedding light on the sexism in film, I hope to start a discussion about the inequality that exists on and off screen and the importance of including

SIlent Film Industry in Hollywood

1422 words - 6 pages the most successful industries in the United States. Every major industry has its beginning and Hollywood’s beginning goes all the way back to the late nineteenth century. Hollywood’s early years are referred as the silent film Era in the film industries. This was due to the films having no synchronized recorded sound with the film. The thought to combine motion picture with recorded sound is nearly as old as film itself. However combining

the world's biggest film industry

1279 words - 6 pages Today you see films everywhere you go, but do you ever think about films in other countries around you? Well, India’s Bollywood Film Industry is the biggest in the whole wide world. The Indian Cinema was started in a very unique way; there are also a lot of amazing superstars in this industry. Films have changed a lot over time since 1896. Bollywood originated from the Lumiere Brothers when they filmed six short films in a hotel in Mumbai, India

Computers and the Film Industry

997 words - 4 pages Computers and the Film Industry Computer technology invades the film industry. The existence of computers have aided in the production of genres of film ranging from action movie special effects, to cartoon animation and claymation. Computer Generated Imagery, better known as CGI, assists filmmakers in many ways. An image can be made two-dimensional from a three-dimensional scene, camera angles can be altered to make a character seem

The State of Solar Power Policy And Incentives in Vermont

1969 words - 8 pages made the sale of grid-tied PV and other generation equipment exempt from the 5% sales tax. In 2002, this exemption was extended to off-grid and hot water systems. This info comes from the Database of State Incentives for Renewable Energy website. Not a State of Vermont entity but very useful. The Dept. of Public Service also has an extensive on-line presence with two main resources: the Vt. Renewable Energy Business Directory and the Vt

The History of Film, and the Film Industry Today

782 words - 3 pages In 1867 William Lincoln patented a contraption that would revolutionize the entertainment industry. Lincoln’s first film capturing camera was called the “zoopraxiscope” or the “Wheel of Life.” Later on, in the 1890’s people began creating their own versions of portable cameras, whereas Lincoln’s camera was always mounted to a tripod, to prevent moving pieces from breaking. There is no way they could have known what an impact they would have

The Film Industry During the Great Depression

1020 words - 5 pages The Great Depression is when the film industry boomed with new types of movies like: gangster films and musicals. They were both born in the Great Depression. Most films show the hardships of the time period. Some of the films display this very well for example Modern Times staring Charlie Chaplin. One of the more well-known gangster films was The Public Enemy.. These films have very different views of the time period but still have things in

Female Film Directors and the British Film Industry

3948 words - 16 pages In this essay I will be discussing whether female filmmakers in Britain find it easier to make a documentary feature than a fiction feature film in the current British film industry. I will be referring to the opinions and films of Kim Longinotto, Carol Morley, Clio Barnard and Alison Stirling. I will also be looking at the statistics from film festivals and the British Film Institute, and interviews with various British female filmmakers. I

Similar Essays

The Film Industry In Florida Essay

1582 words - 7 pages Florida is known for many things like its fresh oranges, its sunshine and warm climate, its beautiful beaches, its Everglades National Park, cigar factories and many more interesting things. There is also one more thing that adds on to Florida’s popularity and it is its film industry. The film industry in Florida is one of the largest in the United States. In 2006, Florida was ranked third in the U.S. for film production, after California and

Motivation And Employee Incentives In The Call Center Industry Case Study

944 words - 4 pages . Figure out the variables that influence the inspiration of the representatives of the Centre. Its objectives are to distinguish the issues confronted by call centre staff, so that the managers of call centres are necessary incentives to motivate their staff. This will help to make an improved working environment where every representative will flourish. There are two sorts of information that could be gathered, in particular essential or optional

Technological Evolution In The Film Industry

847 words - 4 pages As times are changing, knowledge and information are also changing. With that, the development of motion picture complexity has changed the film industry by a continuing technological evolution. It is evident that films have changed significantly over the last 100 years. The intricacy of filmmaking technology has rapidly progressed, allowing creative potential for filmmakers. Films are often due to technological advances, or even to reintroduce

"Distribution Causing Changes In The Film Industry."

873 words - 3 pages up the Theater environment. The theater had to be closed and soon after a few other family owned theaters and drive-ins followed.The film industry market in 2006 had a total Box Office Gross of $9,277,289,097, with1,416,380,029 tickets sold at an average ticket price of $6.55. The major movie theater chains in America, Landmark, Regal Entertainment and AMC, take in an average of $2.5 billion annually. During the 2001-2002 recession, AMC was the