Hollywood to Washington: Give us a break, too

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Wall Street’s getting help. U.S. manufacturers have gotten a hand. Now Hollywood would like a little love from Washington, too.

A coalition of unions and industry-backed groups are putting aside their differences in an effort to tackle the long-standing problem of runaway production, which has drained thousands of film jobs from the Southern California economy. Members of the unlikely alliance -- politics makes interesting bedfellows -- are pressing lawmakers for some tax breaks that they say will keep film and TV production in the U.S.

Included in a broad tax-extension bill on Tuesday was a provision that would allow film and TV producers to get the same tax deductions American manufacturers such as General Motors, Boeing and Xerox receive for making their products in the U.S. Currently, the big Hollywood studios don’t benefit from the provision because the deduction does not apply to short-term workers, who make up the bulk of a movie’s payroll. The proposed change to the tax code would allow producers to deduct the wages paid to full-time as well as short-term workers for domestically produced films and TV shows.

‘Our tax laws have helped push American film production abroad,’ said Sen. Dianne Feinstein (D-Calif.), who supported the measure, in a statement. ‘This legislation will help level the playing field.’

Additionally, the tax package removes the budget cap on the existing tax credit, which was limited to movies that cost less than $15 million to make -- effectively excluding most studio films, which cost an average of $70.8 million, according to Hollywood’s trade and lobbying arm, the Motion Picture Assn. of America. The change would allow producers to immediately deduct all production costs up to $15 million.

‘We certainly believe a federal incentive will only complement all the state incentives we have in place to bring productions back to the U.S.’ said Pamm Fair, deputy national executive director for the Screen Actors Guild, which has joined the Directors Guild of America, other unions and industry groups including the Independent Film and Television Alliance in lobbying for improved tax credits.

The tax bill, which has been passed by the Senate, still needs to be approved by the House and signed by the president in order to become law. Given the current financial crisis, however, Hollywood may have to wait a little longer for the sweeteners.

-- Richard Verrier