Big Kahuna tax credit remains intact

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The highlight of Hawaii's film incentive program is Act 88, a relatively straightforward tax credit applicable to all qualified in-state production spending on projects with a minimum spend of $200,000, capped at $8 million per production.

"It gives a straight cost savings," says Donne Dawson, commissioner of the Hawaii Film Office. "You can easily plug it into a budget and know you're going to realize a 15% cost savings on your spend on Oahu," where most projects are based, "and 20% on the neighbor islands."

In addition, the state has Act 221, which offers Hawaiian taxpayers investing in "qualified high-technology business," including film and TV productions, a 100% credit on the investment, up to $2 million per investor per year, credited over the duration of five years. Or at least it did. In May, the state legislature passed a bill (SB 199) that will reduce the credit from 100% to 80%, eliminate the year-to-year carryover and limit the return on investment to a ratio of 1-to-1.

The change comes as a big blow to companies like Hawaii Film Partners, which has used Act 221 to fund a wide range of projects, including the Saturday morning NBC series "Flight 29 Down," the Nicktoons animated series "Ape Escape" and the upcoming feature "You May Not Kiss the Bride."

"The beautiful thing about Act 221 is it has allowed for capital to become available to companies in the state," Hawaii Film Partners co-founder Rann Watumull says. "Now, there's no guarantee."
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