More Debits & Credits Posts

Filmdom Offers Tax Breaks to Entice Movie Production

February 25, 2011

Culver City, Calif., has suspended a business tax to attract more movie producers to shoot films in the historic city.

The City Council at the Southern California town, which calls itself “The Heart of Screenland,” voted February 7 to stop charging production companies a tax of $1 per $1,000 spent on operations costs, according to The Hollywood Reporter. The tax will be suspended for five years.

Before the City Council voted to suspend the production tax, it had considered capping the tax at $12,000 a year. The nearby city of Los Angeles now caps its production tax at $12,495 a year. The Los Angeles City Council voted last December to cut taxes for companies shooting movies in the City of Angels.

Culver City has been a historic center of movie production for nearly a century. Movie pioneer Thomas Ince set up two studios there in 1915 with his partners D.W. Griffith and Mack Sennett, before selling one of them to Samuel Goldwyn in 1918. Sam Goldwyn turned it into the Goldwyn Studios in Culver City, which in 1924 became the Metro-Goldwyn-Mayer studios with Goldwyn’s partner Louis B. Mayer. The backlots in Culver City were the site of classic MGM productions like “The Wizard of Oz.”

Also in Culver City, the Hal Roach Studios were where Laurel and Hardy, Harold Lloyd, and the Our Gang comedies were filmed, starting in 1919.

Ince’s other studio in Culver City was sold to Cecil B. DeMille and it became the DeMille Studios after Ince’s death in 1924. It was later the site of the RKO studios, where the Fred Astaire and Ginger Rogers musicals were filmed, as well as “King Kong.” David O. Selznick took it over, and the Selznick Studios was the site of “Gone with the Wind.” Eventually Desilu Productions took over the studio when Lucille Ball and Desi Arnaz bought RKO in the 1950s, and classic TV shows such as “Lassie,” “Hogan’s Heroes,” and “The Untouchables” were filmed there.

Culver City and Los Angeles are competing against other states like Georgia and New Mexico, which have been trying to lure more movie productions. At least one state, however, may give up its tax incentives for movie producers.

That one is Michigan, which is trying to cope with an enormous $1.8 billion budget gap. Michigan Governor Rick Snyder has proposed eliminating the tax credits, which amounted to $60 million last year, according to The Wall Street Journal, and substituting them with $25 million in annual incentives. However, actor Jeff Daniels, a Michigan native, rallied hundreds of small business owners in the state on Thursday to keep the tax breaks in place.

Iowa and Massachusetts have also been considering changes in their film tax credit programs after recent reports of abuses (see Moviemakers Charged with Stealing Film Tax Credits and Millions in Tax Breaks in Massachusetts Went for Movie Stars).

Meanwhile, Culver City and Los Angeles are aiming to keep movie production from straying far from Hollywood, which is right where most audiences expect it to be.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.