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Industry Report: Focus: North America

Hollywood gets five more years tax credits


- The California state Assembly has voted to extend incentives for its entertainment industry for five more years in a bid to keep movie-making jobs in Hollywood.

The assembly approved up to $US500 million ($A468.38 million) in additional tax credits to stop other states encroaching on Hollywood's movie-making industry.

The California Film and Television Tax Credit Program enacted in 2009 has already helped keep some $US2.2 billion ($A2.06 billion) in film and television production and 25,000 crew jobs in California, said Assemblyman Felipe Fuentes, a Sylmar Democrat, arguing for the extension.

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The Assembly voted 72-1 to extend the program from 2014 to July 2019. The bill goes next to the state Senate.

Supporters said other states and nations have been stepping up their incentives to lure away film and television work.

California lost production jobs for years until the credit took effect, said Assemblyman Anthony Portantino and it was carefully crafted for economic benefit to the state.

"You had to create the job here to get the credit," he said.

Democrats and Republicans both backed AB 1069 as a way to preserve California jobs, though some GOP lawmakers said other industries needed the help as much as Hollywood.

Only Assemblyman Chris Norby voted against the bill, saying the tax credits tilted the level playing field of business competition.

"This is about picking and choosing economic winners and losers," Norby said. "If you want to support Hollywood, go see a movie. I haven't seen one in a long time."

Los Angeles area legislators had pushed for a production tax credit for years without success until then-Governor Arnold Schwarzenegger got behind the idea in 2008. His backing was pegged to a decision by the producers of the ABC Studios television series Ugly Betty to move production from Los Angeles to New York, costing about two-thirds of the 150 crew members their jobs on the $US3 million ($A2.81 million)-per-episode show.

New York had offered the producers a 35 per cent tax credit.

California's credit, against income or sales taxes or both, is not quite that rich. It covers up to 25 per cent of production budgets spent in the state and applies to films with production budgets of up to $US75 million ($A70.26 million), TV movies, miniseries and certain series. It sets aside at least $US10 million ($A9.37 million) of credits for independent films from the $US100 million ($A93.68 million) available each year.



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