The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“FILM AND TELEVISION EXPENSING LEGISLATION” mentioning the U.S. Dept. of Commerce was published in the Extensions of Remarks section on pages E1316-E1317 on June 4, 2009.
The publication is reproduced in full below:
FILM AND TELEVISION EXPENSING LEGISLATION
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HON. JOSEPH CROWLEY
of new york
in the house of representatives
Thursday, June 4, 2009
Mr. CROWLEY. Madam Speaker, I rise with my colleague from California, Congressman David Dreier, to introduce legislation to amend Federal tax law to allow for the immediate tax write-off of the first $15 million
(or $20 million in those select cases where the production is made in a distressed community) of production expenditures for qualifying domestic film and television productions.
This provision, Section 181 of the Internal Revenue Code, was first enacted in the American Jobs Creation Act of 2004 and extended in 2008. It was added to protect the U.S. television and film industry that is increasingly filming in foreign locations, such as Canada.
In so doing, Congress recognized the important contribution our television and film production industries make to sustaining jobs in communities across the country. These productions provide good jobs not just for actors, writers and directors, but also for the local carpenters and electricians, the drivers and equipment operators, the caterers and hotel keepers who provide services to these productions.
Adoption of Section 181 also represented Congressional recognition of the fact that this vital sector faces increasing competition from foreign production companies whose governments subsidize television and film production.
In 2001, the Commerce Department's International Trade Administration reported that made-for-television production of ``movies of the week'' in the U.S. had declined by 33 percent since 1995 and that production at foreign locations increased by 55 percent.
The Directors Guild of America noted at the time that
``globalization, rising costs, foreign wage, tax and financing incentives, and technological advances, combined are causing a substantial transformation of what used to be a quintessentially American industry into an increasingly dispersed global industry.''
Section 181 of the Internal Revenue Code allows production companies to deduct the cost of qualified U.S. productions immediately rather than capitalizing the costs and deducting them slowly over time.
The incentive accelerates the timing of deduction but it does not change the amount of the deduction. In order to qualify, at least 75 percent of the total compensation paid for the production must be for services performed in the U.S. by actors, directors, producers and other production staff personnel. The deduction applies to the first
$15 million ($20 million for productions in low income communities or distressed area or isolated area of distress) of a qualified film or television production. The cost of the production above the dollar limitation is capitalized and recovered under the taxpayer's method of accounting.
I believe that this was an appropriately targeted provision, designed to encourage television and film producers to stay here in the United States and keep those jobs in our communities. In the last decades, New York City and in particular my home borough of Queens has seen a resurgent television and film production sector bring new jobs and revenue into the community. This bill will help to ensure that those jobs stay here in the U.S.
The Center for Entertainment Industry Data and Research's Year 2005 Production Report concluded that Section 181 ``is having a positive effect on television production in the U.S.'' Since 2004, it reported that made-for-television movie production in the U.S. increased by 42 percent, while it fell in Canada by 15 percent.
Along with my Republican sponsor, Congressman David Dreier of California and myself who hails from Queens, New York, the television and film industries are both major employers and major tax providers to our local, state and national economies. This legislation works to protect these industries and stem the flood of production to non-U.S. locations.
Section 181 will expire in 2009. It ought to be made a permanent provision of our tax code in order to keep television and film production jobs in the United States.
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