Petition: IRS Section 181 Film Tax Incentive Program

The Internal Revenue Service Section 181 (Get More Information Here)  has been providing tax breaks to investors in films and TV shows shot in the United States for more than a decade. But without an act of Congress, it will no longer provide any incentives for filming in the United States of America. This petition is to the United States Congress to pass 181 in 2017 and, depending on how long that takes, retroactively allow films made in the USA who qualify to take advantage of it.

It is extremely important that we have this tax incentive, especially for independent filmmakers who don’t have access to deep pockets and huge resources like the bigger studios. Promising a 25-50% guaranteed return to investors is the major selling point to seeking funding for a film project and unless 181 is passed again, independent filmmakers are going to lose a huge leverage point in their negotiations.

Under Section 181 anyone who spends $1 million for a qualified film or TV show can claim a 100% loss against taxable income in the year or years the money is spent. A producer or investor in the 30% tax bracket would thus be able to save $300,000 in taxes, while someone in the 35% bracket would save $350,000. Coupled with a share of the tax incentives offered by various states, a smart investor can be assured of a 50% to 70% return on investment whether the project’s a success or not. This is a huge factor in finding funding for any independent film production, indeed any film production at all in the United States of America.

The MPAA (Motion Picture Association of America) has called Section 181 “an important provision that promotes domestic film production.” Last year, when it was again lobbying for its extension — as it does every year — the MPAA reminded the co-chairs of the Senate Finance Committee that “Congress enacted Section 181 in light of the job-creation, economic growth, and other benefits that flow from film making in the United States. A major motion picture shooting on location contributes roughly $225,000 every day to the local economy. Recognizing the economic benefit of film production to their local economies, many of our major trading partners, (e.g., Australia, Canada, France and the United Kingdom) offer significant wage credits and other above-the-line incentives to attract film productions and jobs abroad.”

Section 181, the MPAA told the senators, “helps to respond to these foreign film incentives and encourages feature film and television productions to remain in the United States.”

The purpose of this petition is to raise awareness for 181 to those who do not know about it and to raise enough support to take to Congress to fully enact Section 181 in 2017 to allow for more films to be made in the USA instead of in foreign countries.

Please share, like and retweet this post using the buttons available below. It is extremely important that we ensure this tax incentive remains available for the entertainment industry in 2017 and we must all come together to unify a voice for the American Congress.


About Justin Kincaid

Justin is the host of Film Fervor and a passionate lover of independent entertainment. Indie films are where people can truly express themselves and Justin believes that there are too many limitations on "mainstream" movies to be able to tell good stories.

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