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Davis Seeks Tax Credit For Film, TV Production

11 Jan, 2002 By: Hive News

In a bid to keep film and television production companies from migrating their locations to Canada, Calif. Gov. Gray Davis is seekingtoi give them a major tax credit.

Such defections cost California's economy as much as $10 billion each year, according to state figures. But Davis' plan could save film producers $50 million to $100 million in its first three years, Davis' office said.

The plan, which would take effect in 2004, would help create "an atmosphere that lets filmmakers know that California really wants their business," Davis told the Associated Press.

His plan proposal parallels one before Congress that offers a 25 percent tax credit.

Canada already offers wage-based incentives that can cover 35 percent of labor expenses.

Those credits have cost the United States 25,000 jobs and $10 billion annually in each of the past three years, entertainment industry executives and labor officials say.

Davis wants to grant producers a 15 percent tax credit on the first $25,000 workers earn on lower-budget productions if nearly all of the filming takes place within the state. The credit would offset state taxes applying to the companies that make the films.

State Rep. Howard Berman, a Los Angeles Democrat, welcomed the governor's proposal.

"That would be very helpful to us because showing that states that are most impacted are willing to make an effort will help in Congress,'' said Berman, coauthor of the tax credit legislation.

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