In his new article published on February 14 in the “Revista de Cinema,” Steve Solot, President of Latin American Training Center-LATC and Executive Director of the Brazilian Film Commission Network-REBRAFIC, writes about the only federal incentive for audiovisual content production in the US, the famous “Section 181”, that is about to die silently this month without its renewal by congress, following the Trump administration taking Office.

A Slow Death of the Federal Film Production Incentive under Trump

by Steve Solot

The only federal incentive for audiovisual content production in the US, the famous “Section 181” will die silently this month without its renewal by congress, following the Trump administration taking Office.

Originally established as part of the 2004 American Jobs Creation Act under the George W. Bush administration, the incentive provides a significant benefit for independent producers and investors. Unlike the conventional method of allocation depreciation over various years, Section 181 allows the investor to deduct 100% of the amount invested from taxable income in the same year the money is spent.  For a major investor, it could amount to a fiscal incentive of up to 30% of tax due.

Hollywood considers the loss of the incentive as the first casualty of the Trump administration, which is already viewed as a threat to the liberal creative industry, especially after the emotional anti-Trump speech by actress Meryl Streep at the Golden Globes Award Ceremony.

According to US legislative procedure, in order to prevent the automatic expiration or “sunset” of Section 181, it must be renewed annually, which has occurred up to now.  However, this year, with the instability of the US Congress and lack of support by Trump, there is no expectation for the renewal.

Meanwhile, in Los Angeles, thanks to the increase in funding of the California state audiovisual incentive program to U$330 million, film production increased 6.2% in 2016 compared to 2015, and TV series production increased 4.8%.  The number of film “shooting days” reached 4,868, a record since the creation of the incentive program in 2009.

Despite the new controversial study by University of Southern California professor Michael Thom, which questions the real impact of film production tax credits, 39 of the 50 US states continue to offer some form of economic support to attract film and television productions.  In addition, every day more countries around the world are creating their own incentive systems, taking into account different local and cultural characteristics.  In Europe, for example, each country uses the so-called “cultural test” to ensure that films and series that benefit from public funding are consistent with national cultural values. In Latin America, at this time, only Colombia, Panama, Mexico, Trinidad and Puerto Rico offer foreign production incentives.

Given the impressive resources available in the California incentive program, it is worthwhile to recall that the doors are open for Brazilian producers to develop contacts for co-productions and production services, and to take advantage of the film and TV incentives through the various existing agreements:

  • Memorandum of Understanding between the Interstate Audiovisual Union-SICAV and the Producers Guild of America (PGA) based in Los Angeles, and which represents film, television and new media producers in the US. (11/2013)
  • Cooperation Agreement between the Association of Film Commissioners International-AFCI, based in Los Angeles and the Brazilian Film Commission Network-REBRAFIC. (5/2015)
  • Cooperation Agreement between the Brazil California Chamber of Commerce-BCCC, based in Los Angeles and the Brazilian Film Commission Network-REBRAFIC. (7/2015)
  • Cooperation Agreement between RioFilme/Rio Film Commission and the Los Angeles Mayor’s Office of Film and Television Production. (11/2016)

The next step in the process to promote co-productions between Brazilian and US filmmakers, as well as to promote location filming in Brazil, will be the participation of the Brazilian Film Commission Network-REBRAFIC in the international film commission trade fair and conference AFCI Locations Global Production & Finance Conference, in Los Angeles, April 6-8. During this event, which combines a conference with an international trade fair, REBRAFIC, which represents operational 10 film commissions and 16 in development in 14 states and the Federal District, will be represented by its Executive Director.

In Brazil, REBRAFIC is preparing to launch the first “Film Tourism Seminar” during second semester 2017.  Tourism induced by film and television is already considered a significant source of benefits for specific regions, and many countries have planned their official tourism strategies around the promotion of locations where films and TV series were shot.  A film has the effect of a virtual brochure on the spectator, but with three additional advantages over traditional publicity: it has a longer-lasting effect, it reaches a wider audience and it creates emotional links as it integrates landscapes with stories and characters which attract the spectator in a more intense form.

The mission of REBRAFIC is to ensure a standardized, high level of support for national and international producers, promote all regions of Brazil as premier locations for national and international productions, and to organize and making available information on film commissions from all regions of the country. The REBRAFIC Advisory Board includes leading audiovisual content production entities in Brazil: Brazilian Assn. of Independent TV Producers – BRAVI, Interstate Audiovisual Industry Union – SICAV, São Paulo State Audiovisual Industry Union – SIAESP, Brazilian Assn. of Audiovisual Works Producers – APRO, Cinema Foundation of Rio Grande do Sul-Fundacine and Cinema do Brasil.

Originally published (in Portuguese) in:

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