Getting the most out of production tax credits


With 29 U.S. states now offering film and TV production tax incentives, producers can find money-saving shooting locales all across America, as well as in Canada and Eastern Europe. But, for many, the surplus of options has simply made making the right choice more difficult. Sensing a need in the marketplace, outside consultants are stepping forward to help producers sort through the ever-shifting mountain of credits and rebates, as well as liaise with studios, production-services companies, tax-credit brokers and film commissions.

"Even studios that have all of these people sitting in the back office that are supposed to be experts have been guilty of making the decision to go to these places to take advantage of a credit only to find that they don't qualify for it after they've gone there and spent a lot," says John Hadity, president and CEO of John Hadity & Assoc., an independent firm specializing in film and TV production planning and financing. "That doesn't happen often, but it has happened, and it's embarrassing."

Two of the companies helping producers grapple with tax incentives are Entertainment Partners and Axium International, both of which specialize in entertainment-payroll services. "For anyone who's working with us as a payroll client, we provide whatever service they need to take advantage of the incentives," says Joseph Chianese, who left his post as senior director of tax at Sony Pictures in September to join Entertainment Partners as vp business development and production incentives. "But we're also offering our tax consulting and administration services as a separate business, both on a retainer basis or on a monthly or annual-fee basis."

At Axium, advice is doled out on a more informal basis.

"We don't do it as a consulting business, but we will help producers," says Axium's Jeff Begun. "I get one or two calls a day from people who want to know where they should shoot, and we can explain to them that it's different depending on the budget, and it depends on when you want to shoot. Like right now, you can do a picture in New Mexico because there's a lot of crew available. A few months ago, you had a problem finding crew."

Begun helps the industry keep up to date with two free publications, "The Complete Guide to U.S. Production Incentives," which is published four to five times a year, and "The U.S. Incentives Newsletter," an e-mail update sent every two to four weeks. The process of keeping the guide current has built Begun's relationships with film commissions and local governments around the country, and he now finds himself being called on to help with the tax incentives themselves.

"I think the biggest mistake they make is making it so only in-state people qualify because what happens is most of these states don't have anybody with training," Begun says. "That's the big thing we did up in Wisconsin. We showed them if they'd allow out-of-state people to come in for two years, use that time for training people, and then phase it down and say, OK, after two years, you can only have half your people from out of state,' they end up bringing in a lot more people in and actually build up an industry."