The Hollywood Tax Break continues
Nice to know that while payroll taxes go up for the rest of us, the new tax bill continues the special entertainment tax deduction. Because we know how many in the entertainment industry are indigent. Here's a summary. Essentially, the producing company gets a deduction of 9% of its income, up to 50% of the wages it paid.
Arizona used to have a State tax credit as well; New Mexico still has one. Since Hollywood companies aren't headquartered here, and thus don't pay corporate income taxes here, ours was transferrable, i.e., they could sell the tax credit to someone who did pay Arizona income tax. Note these are tax credits, not deductions: a $10 tax credit reduces your taxes by $10. New York offers an incredible 30% tax credit for filming! In practice, that means that, instead of paying taxes, a filming company is funded by the government.
When we say funded by government, we mean paid for by taxpayers not influential enough to get special treatment.
Posted by: Peter at January 3, 2013 04:34 AM