The Senate passed legislation meant to end the “fiscal cliff” crisis in the wee hours of the morning. And it seems Hollywood’s rigorous backing of President Barack Obama and his Democrat peers in the waning months of 2012 paid off.
Section 317 of the freshly approved legislation includes an extension for “special expensing rules for certain film and television productions.” Congress first enacted production tax incentives favorable to the domestic entertainment industry in 2004, and extended them in 2008, but the deal was meant to expire in 2011.
The fiscal cliff deal extends the tax incentives through 2013–even as payroll taxes rise on ordinary Americans.
The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.
Hollywood players routinely beg the government to raise their taxes so they can pay their “fair share.”