Last updated: February 7, 2012 - 9:33am
While California's film tax credit is providing an economic benefit to the state, it may not be providing as much of a return to taxpayers as an earlier study claimed.
That's one of the main conclusions from a new study conducted by UCLA's Institute for Research on Labor and Employment about a program the state adopted in 2009 to help curb runaway production. The state sets aside $100 million annually for the program, under which filmmakers can receive a credit of 20% to 25% of qualified production expenses (salaries of actors are excluded). They can apply the credit to offset any sales or business tax liability they have with the state. The UCLA study concludes that the California tax credit "is creating jobs and is likely providing an immediate economic benefit to the state," but finds that some claims about the program's value have been exaggerated. In particular, the study takes issue with some aspects of a report by the Los Angeles County Economic Development Corp. and financed by the Motion Picture Association of America that found that for every $1 the state allocated in a tax subsidy, the state recouped as much as $1.13 in spending.
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