Overview of Film Production Tax Incentives
Motion Picture and Television Production Tax Incentives (hereinafter “MPIs”) are tax incentives that are available at the U.S. Federal Level, at most of the U.S. Multi-State Levels, and on a Global Level through nearly a hundred participating countries worldwide and should certainly be incorporated into the tax planning process for movie and television studios to properly tax affect their costs of production.
Three Primary Phases of Film Production
The three primary phases of qualified filmmaking production include the “Qualified Pre-Production Phase”, the “Qualified Production Phase”, and the “Qualified Post-Production Phase”. It should be duly noted that it is fairly common practice in the movie and television studio industry to shoot the aforementioned phases of qualified production throughout several locations (e.g., Qualified Production Phase in the City of Los Angeles, California, USA and the Qualified Post-Production Phase in the City of Vancouver, British Columbia, Canada). Consequently it is critical to be cognizant of tax incentives available, as applicable, not only state by state within the United States but also country by country worldwide in order to reduce a movie or television studios global effective tax rate.
On Thursday, November 2nd the House of Representatives released a draft of their tax reform legislation entitled ‘The Tax Cuts and Jobs Act’ as presented by the Ways and Means Chairman Kevin Brady (R-TX). This legislation represents the largest proposed transformation of the U.S. tax code in more than thirty years. While both changes are expected in the committee markup phase and the Senate will certainly bring its own priorities to the process, this release is the first bill text we’ve seen from a tax-writing committee. The goal of President Trump and the Republicans in Congress is to have a final tax bill enacted ideally before the Thanksgiving break, but certainly before the calendar year end of 2017. The subsequent synopsis will serve to highlight just some of the more significant provisions of this bill in its current form and its impact on both individuals and businesses.
Every week, until the end of the year, we will be celebrating one of our top writers on TaxConnections.
This week we are honoring Peter Scalise.
On December 18th of 2015, President Obama signed into law a sweeping $1.14 trillion dollar funding bill that will keep the federal government operating through September 30th of 2016. In connection to the tax aspects of this comprehensive and pivotal legislation, the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) accomplished considerably more than the typical tax-extenders legislation passed in previous years and truly signifies a dynamic paradigm shift as the PATH Act makes permanent over twenty leading tax incentives while extending other tax incentives over either a five year period or a two year period.
In particular, the PATH Act meaningfully enhanced the R&D Tax Credit Program (hereinafter “RTC program”) on a myriad of levels. As an overview, the RTC program was initially added to the U.S. Internal Revenue Code (hereinafter the “Code”) in 1981 through the Economic Recovery Tax Act of 1981 as a temporary provision of the Code. The RTC program had most recently expired on December 31, 2014. A tremendous paradigm shift to the RTC program was made possible through the PATH Act which not only renewed the RTC retroactively for all of calendar year 2015 but most importantly made the RTC program permanent. In addition, the enhanced RTC program has been considerably restructured to: Read More
On December 18th of 2015, President Obama discussed a Legislative Tax Update on Capitol Hill. He signed into law a sweeping $1.14 trillion dollar funding bill that will keep the federal government operating through September 30th of 2016. In connection to the tax aspects of this comprehensive and pivotal legislation, the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) does considerably more than the typical tax-extenders legislation passed in previous years and truly signifies a dynamic paradigm shift as the PATH Act makes permanent over twenty leading tax incentives, including the Research & Development Tax Credit Program, the American Opportunity Tax Credit Program and the enhanced I.R.C. § 179 Expensing Program. The PATH Act further extends other key tax incentives, including the Bonus Depreciation Program and the New Markets Tax Credit Program for five years while reinstating other significant tax incentives for two years. The PATH Act also imposes a two-year suspension on the ACA Medical Device Excise Tax.
The subsequent synopsis will serve as a practical overview of just some of the many far-reaching changes enacted by the PATH Act affecting both business entities and individuals including, but certainly not limited to: Read More
On September 22 of 2015, Senate Democrats introduced a comprehensive energy reform bill entitled “The American Energy Innovation Act” that would reform current energy policy and enhance over forty tax incentives subsidizing energy production.
The legislation addresses the need for the creation of new energy based jobs in connection to both infrastructure advancements and technological innovation. As a synopsis, the bill includes programs essential to renewed economic growth in the energy sector that empower consumers; modernize infrastructure; cut carbon pollution and waste; invest in clean energy; and support research and development initiatives.
The tax aspects of the legislation would modify several energy tax incentives already in Read More
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♦ Corporate Multinational Tax Departments Today- The Tax Provision (ASC 740/FAS 109)
Shamen Dugger, McGladrey LLP, San Francisco and San Jose, CA
♦ New And Upcoming National Nexus, The U.S. Congressional Marketplace Fairness Act
Dan Thompson, Thompson Tax, Silicon Valley, CA Read More
The Broad Tax Extenders Coalition (hereinafter “the Coalition”) are recommending to lawmakers on Capitol Hill to take immediate action on over fifty tax provisions that previously expired on December 31st of 2014. In a recent letter dated September 10th of 2015, the Coalition comprised of over two thousand organizations informed members of Congress that failure to timely extend the tax provisions will result in a significant increase in tax liabilities on both business entities as well as individuals.
As a background it should be duly recalled that previously on July 21st of 2015th, the Senate Finance Committee overwhelmingly passed a tax extenders bill with a bipartisan vote of 23 to 3 that planned to extend over fifty previously expired tax provisions for a two year period (e.g., retroactively to cover all of calendar year 2015 and prospectively to cover Read More
Watching tax professionals reputations grow with higher visibility and authority in tax services is very exciting. Allow me to share the stories of tax professionals who are utilizing new marketing technology only available on www.taxconnections.com.
We focus on powerful native advertising strategies developed with TaxConnections proprietary software. For those of you who are unfamiliar with native advertising, it is a way to market your tax services without people realizing it is an ad about your tax services. We spent years developing this technology and we are delighted to see our members gaining new clients and authority for their tax expertise every day. Allow me to introduce some of our members and how they are accelerating their tax reputations. Read More
Our members blogs are read by visitors from 210 countries and territories around the world. We are amazed as we watch our members gain better visibility for their tax expertise and more authority in the marketplace. TaxConnections Bloggers have a unique style that resonates with our readers. We love the way our Tax Bloggers make the stories relatable to our readers. When you are marketing for new clients the secret is to make it less technical and more relatable. This week I want to give you all examples of our Tax Bloggers who had some of the most read blog posts over the past year: Michael DeBlis, John Dundon, Barry Fowler, Jeffrey Kahn, Manasa Nadig, Peter Scalise, John Stancil, Hugo van Zyl and so many more.
If you are interested in enjoying a wider distribution of your tax blogs and reputation to our hundreds of thousands of readers, please join us today!
On February 13 of 2015, The Internal Revenue Service (hereinafter the “Service”) streamlined the methodology for small business owners to comply with the Final Treasury Regulations (hereinafter the “regulations”) governing Tangible Property with newly released administrative authority.
Revenue Procedure 2015-20 permits small businesses to change a method of accounting under the regulations on a prospective basis for the first taxable year beginning on or after January 1 of 2014. Moreover, the Service is waiving the arduous requirement to file a Form 3115 Read More
On Thursday, January 29th the Democrats on the Senate Finance Committee (hereinafter “the Committee”) issued a letter to the Republican Chairman, Orrin Hatch, R-Utah, outlining their main principles for tax reform that emphasizes first that the tax reform process should go through “regular order” and not the budget reconciliation process. “Reconciliation imposes tight restrictions, such as the Byrd rule, that could inhibit our work by forcing us to focus on procedural intricacies rather than good tax policy,” said the Senate Democrats in their letter. “Using, or even the implicit threat of using, the reconciliation process for tax reform would destroy the necessary bipartisanship that made the 1986 reform effort so successful.” Other principles cited by Senate Democrats include making reforms more progressive than current tax policy, and reducing the Read More