Hollywood Wins Tax-Break Extension In Fiscal Cliff Agreement

Studios enjoyed their best year ever at domestic box offices in 2012 — but still managed to persuade lawmakers that movie and TV investors need a sweet tax deduction to keep the cameras rolling in the U.S. The new agreement to avoid the so-called fiscal cliff collection of spending cuts and tax hikes includes a provision enabling investors in productions shot in the U.S. to deduct the first $15M of the costs or $20M if the shooting takes place in low-income areas. Investors love the break, in Section 181 of the Internal Revenue Code, because they can take the entire deduction in the first year instead of spreading it over several years, and can combine it with state tax credits. It began with the American Jobs Creation Act of 2004 and in 2008 was amended and extended to the end of 2011. But Congress didn’t renew it in time for 2012 productions. No matter: the package that lawmakers just approved will provide the deductions for productions made in 2012 and 2013. (more…)

This article was printed from https://deadline.com/2013/01/hollywood-tax-break-section-181-395473/