June 13, 2013

Bill would woo movie, TV production companies with tax break

Financial incentive sought to augment state's natural beauty, unusual quality of light as lure for production companies

By Bob Keyes bkeyes@pressherald.com
Staff Writer

Neal Baer never considered filming his TV adaptation of the Stephen King novel "Under the Dome" in Maine. He took the production to North Carolina.

click image to enlarge

Eric Matheson is working to convert the South Portland Armory, seen here on May 22, into a movie sound stage.

Maine Sunday Telegram photo by John Patriquin

"There are no financial incentives to shoot in Maine," said the TV producer, who is best known for his work on the shows "ER" and "Law & Order: Special Victims Unit."

"These shows are like a bee going to nectar," Baer said by phone from Los Angeles. "We leave L.A. and go to states that have the best incentives."

Right now, those states are North Carolina, Louisiana, New York and Massachusetts. When "Under the Dome" airs on CBS beginning June 24, viewers will see scenes shot in North Carolina even though King set his book in a fictional Maine town, Chester's Mill.

A bill before the Legislature might prompt Baer and his Hollywood colleagues to reconsider Maine as a destination for their TV shows and movies.

The bill, L.D. 1409, formally known as "An Act to Promote Tourism and Foster Economic Development," is designed to lure major movies and TV shows to the state.

Among other things, it would offer a refundable income tax credit up to 25 percent if the overall budget is more than $1 million. A previous provision that would have allowed a 35 percent credit for a movie costing $100 million or more was removed.

"It will be a game-changer, no doubt about that," said Rep. Scott Hamann, D-South Portland, who authored the bill. "Even people who may not be for it, they agree that passing this bill will lead to the creation of a major film in this state. We have to at least match other states if we want to be competitive. Right now, we're not even in the game."

Luring big players

The Maine House is expected to take up the bill this week.

As written, the Maine Visual Media Incentive Plan offers film, TV and commercial production companies that spend $75,000 or more up to a 12 percent rebate of wages paid to Maine residents working on a production, and a 10 percent rebate on nonresident wages. Filmmakers also can claim tax credits equal to 5 percent of nonwage production expenses, as well as breaks on lodging taxes, fuel and electricity.

By comparison, Massachusetts offers a 25 percent payroll credit and a 25 percent production expense credit. Pennsylvania and North Carolina also offer a 25 percent tax credit, while Nova Scotia offers a tax credit that ranges from 50 percent to 65 percent. The tax credits remove a portion of income tax owed to a state by a production company if it meets minimum spending requirements.

Movie production incentives vary by state, and range from tax credits and exemptions to cash grants, breaks on fees and refunds for expenses, including lodging for cast and crew. At present, 42 states offer them.

Proponents like them because they say incentives lead to economic development, job creation and tourism. Opponents argue that the cost of the incentives, mostly lost tax revenue, outweigh the benefits.

Both sides have recent studies to bolster their argument.

Many small, independent filmmakers choose Maine because of its natural beauty and unusual quality of light. If the bill passes, their big-budget brethren may have competitive financial incentives to go along with Maine's rugged coast, verdant forests and quaint small towns.

"We just need to level the playing field," said Joel Strunk, an independent filmmaker from Union who filmed his coming-of-age drama about a trio of boys who grow up together on a Maine island, "Anatomy of the Tide," in 2011 and 2012. He has finished the movie and is shopping for distribution.

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