The financial bailout bill the Senate passed Wednesday has been getting a lot of press for various additions to make it more palatable to one side or the other--including one that would exempt from excise taxes the unvarnished shafts of toy arrows. But just above that provision in the voluminous bill is one that would provide some financial benefit to TV and movie producers.
That provision would extend and modify temporary expensing rules (they were to expire at the end of this year) that are meant to discourage the flight of TV and film production to Canada and elsewhere by expanding the number and type of deductions that can be taken in the year of production.
The expanded deductions are capped at $15 million in costs per production, and include the cost of paying actors producers, directors and production personnel. Currently, the deduction to spur domestic production generally is calculated based on wages of permanent, full-time employees, while TV and film production often relies on short-term workers.
Studios would also now get deductions for TV shows broadcast over the Internet and other delivery platforms. "The methods and means of distributing a qualified film shall not affect the availability of the deduction under this section," says the provision in the bailout bill. They can also deduct income from the licensing of copyrights and trademarks.
The add-on to the bailout bill (officially "SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS") began life separately as the "Domestic Film Production Equity Act of 2008," which was introduced last summer by Sens. Diane Feinstein (D-Calif.) and Gordon Smith (R-Ore.).