California Ramps Up Film Tax Credits

This year, California has set a record for the amount of film and TV tax credits. Lawmakers increased the available funds in response to a reduction in in-state filming. Other filming areas out-compete California on cost, and tax incentives provide a large portion of the savings.

In response, the state has increased its tax incentive program from $330 million to $750 million a year. In this first round, the vast majority of tax credits were awarded to independent films.

As the film industry changes, independent films have an increased opportunity to compete in the market. If you need a production attorney for your independent film, contact The Law Firm of Dillon McCarthy for help. You’ll receive help from someone passionate about bringing your project to life.

Loan Outs in Limbo

The California EDD, the state agency that administers unemployment, has informed multiple entertainment payroll companies that cast and crew working on productions under the common “loan out” method have been misclassified. The EDD contends that many of those working under a loan out agreement should have been classified as employees, with productions paying them directly and withholding taxes from payment.

Loan outs are prevalent in the entertainment industry, with many department heads, actors, and other using them. Loan outs allow workers to own their own company, pay themselves through it, and “loan out” their services to productions. While this can benefit the productions, the primary purpose is allowing the worker to write-off their business expenses, including owned equipment, advertising, and agency fees.

The scope of the EDD’s objections are not yet clear, and the payroll houses, as well as the major guilds, are asking for clarification. It’s unclear whether the EDD is targeting specific instances of loan outs, or if this is the harbinger of a larger ruling. The Franchise Tax Board and other relevant agencies have not yet weighed in either.

This is a story that is likely to change quickly, but the Law Firm of Dillon McCarthy is monitoring the situation and what it will mean for clients.

WGA Reaches Tentative Deal with Studios

After almost 150 days on strike, the Writers Guild of America has reached a tentative agreement witht he AMPTP, the organization that represents the major studios. We still don’t know what’s the terms are as the parties work out the language, and it will need to be ratified by the WGA’s members. But this likely means the end of the strike is coming.

SAG remains on strike for the time being, and just authorized expanding it to video game voice actors.