The results are in from the first full year of California’s latest film and television tax credit program, established to stem the flow of filming outside of the state, and they appear to show a good return on investment.
The program, which gave production companies a total of $230 million in tax breaks, resulted in $1.5 billion in direct spending on things like wages, makeup and hair, and vehicle rentals from July 1, 2015 through June 30, 2016, according to the report by the California Film Commission, a state agency.
In addition, six television shows, including American Horror Story, Veep, ABC’s American Crime, Scream Queens, Mistresses, and Secrets and Lies, relocated to the state.
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“Leveraging modest sustainable tax credits against the robust private spending associated with most film and TV series production empowers our state to retain and grow its share of jobs and economic development generated by this uniquely California industry,” said the report.
The current program, which goes through 2020 and increases the tax credits to $330 million annually starting this year, was established by the state in January 2015. An earlier program started in 2009 provided $100 million in tax credits annually.
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The trend of runaway productions began around the late 1990s when Canada started its tax credit program, according to Amy Lemisch, executive director of the California Film Commission.
Starting around 2003, other states started offering similar programs.
L.A. in particular has benefited from the tax credits because it’s where the majority of filming in the state takes place, said Lemisch.
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“We try to encourage filming all across the state, but especially with TV, they like to stay in the LA area,” she said. This is because of the talent and infrastructure already in place, she explained.
Flemisch is optimistic that with the increase in tax credits this year, there will be more benefits from the program in the future.
“I think we’re going to see even greater numbers next year when the full funding kicks in,” she said.
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