Filmmakers Push to Renew Tax Credits

Posted March 5, 2010 at 5:38pm

Add independent filmmakers to the growing chorus asking Congress to extend certain tax credits, which has become the fiscal issue du jour.

On Thursday, a loose coalition representing the indies’ interests descended on Capitol Hill to highlight the importance of film-friendly provisions in the 2004 Jobs Creation Act that are set to expire at the end of the year. The measures are designed to foster investment in film and stanch the flood of “runaway productions” — film projects that are lured abroad by tantalizing tax breaks. As many as 50,000 jobs and as much as $10 billion annually leave the states, according to one study by the Directors Guild of America.

The Filmmakers on the Hill event was organized by retiring Rep. Diane Watson’s (D-Calif.) office and the Washington, D.C., Independent Film Festival. When Watson leaves Congress after this year, the moviemakers will lose an ally. Watson is chairwoman for the Congressional Entertainment Industries Caucus, and Watson’s communications director, Dorinda White, said her boss is actively seeking a successor within the 44-member caucus.

“I’m very concerned,” independent filmmaker Ron Newcomb said about losing Watson. “Who’s going to carry the torch after she’s gone?”

White declined to name whom Watson has been in talks with but said whoever replaces her “will probably be from a district in California that has a lot of major studios.”

White, who was the president of Women in Film and Video before signing on as Watson’s communications director, noted that the next CEIC chairman may not have a legislative aide with as much experience as White.

“It may just be somebody who takes a passing interest in movies and video games,” she said.

As for their lobbying message, filmmakers expressed frustration with “muddy” language in the Internal Revenue Code that has stymied independent filmmakers’ efforts to pitch movies to investors, many of whom are unable to write off their investments.

Newcomb said he recently had to tell 13 of 17 potential investors that they were not eligible for deductions under the jobs bill because the Internal Revenue Service considers only certain investors eligible for tax breaks.

At the event last week, White suggested that the filmmakers form a group to make suggestions about ways the legislation could be drafted to direct the IRS to clarify what filmmakers have charged is a convoluted tax code. White said her boss would like to introduce legislation in July.

However, forming a cohesive organization has been an elusive endeavor for independent filmmakers over the years because they are an independent bunch. A recent study attempted to gather information on indie filmmakers by contacting them via a variety of listservs and similar modes of communication, but only a small number responded.

Presenting Congress with tangible data proving that independent films significantly contribute to economic growth and job creation will be an essential component to any effort to enact legislation favorable to independent filmmaking, White said. There are no laws specifically geared toward independent film production.

Newcomb said most people don’t realize that independent films are essentially small business, which creates U.S. jobs.

“Hollywood is leaving the U.S., but independent filmmakers don’t have that option,” he said. “So we need better incentives to continue making movies and creating jobs.”