UPDATE 2: Ok, so now the trades and Sharon Waxman’s The Wrap have picked up on the news, so we know a bit more about how much of a writeoff producers get and when the tax breaks go into effect. According to Variety, the incentive covers 20% of below-the-line production expenses up to $75 million. Indie feature productions with budgets of up to $10 million, and all TV series relocating to California (read: come back, Ugly Betty) get a 25% tax break. No word on how long these series will be considered “newcomers.” The Wrap notes that these discounts aren’t as much as the 35-42% credits offered by New York, Louisiana and Michigan.
Waxman’s site also says the provision is still called the “Ugly Betty Bill,” which is nice, but we’re doubtful the cast and crew would want to pick up and move—again. I mean, they just started filming in New York this year and had to build a new set and the show’s supposed to take place in New York anyway…And Variety says they might not need to: “‘Ugly Betty’ managed to snag one of the last remaining tax credits, so it may be safe in New York for another season.” (FYI: The trade also adds In Treatment to the list of NYC-based TV shows looking for a new home now that the state’s tax credit is gone.)
As Nikki noted, Cali’s discounts don’t seem to kick in right away. It’s a bit confusing, but here’s how The Wrap explains it:
The program is funded for five years at $100 million per year beginning in fiscal year July 2009/10 through the 2013/14 fiscal year. Credits may not be utilized until tax years beginning in Jan. 2011.
So, if they don’t get the credit right away, why move back now? In fact, this provision seems to place a greater burden on New York to renew its tax incentive program, because the state could provide an immediate relief to shows now facing higher expenses.
The story of California and New York’s production incentives hasn’t been getting much coverage, until today, but it’s an important one. For years, movies and TV shows had been fleeing Hollywood, which offered no special tax breaks to local productions, to film in cheaper climates, including New York, which made a concerted effort, through tax cuts and the NYC’s separate “Made In NY” incentive program, to lure productions to the state. As more and more TV shows and films moved out of Hollywood, it seemed like the geography of the entertainment industry was shifting, and the news that New York’s run out of money to fund its tax credits and California has finally approved incentives to keep productions in state means that the geographic base of the industry could be shifting back to LA. Plus, as others have noted, a loss of film shoots in New York and elsewhere means lost jobs for crew members based in those places.
UPDATE: Now, Nikki says those tax credits won’t kick in until 2011, so they might not have any bearing on whether shows currently based in New York stay put. Albany is expected to consider whether to renew New York’s tax-credit package in April.
EARLIER: While the fate of New York’s film and TV tax incentives hangs in the balance, California is finally offering tax breaks to film and TV production companies.
After days of gruelling discussions, the California legislature finally approved its new budget bill this morning. And Nikki Finke reports that the bill includes $100 million in moviemaking tax incentives annually for five years, designed to lure producers back to the state.
Now, the question is will TV shows that have fled to Canada and New York, like Ugly Betty, after which the provision was originally named, return?