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O California, Where Art Thou: Why Is the Tax Incentives Program Driving Away Indie Film?

Indiewire By J. Todd Harris | Indiewire July 31, 2012 at 11:30AM

There were many reasons we chose Los Angeles, despite the fact that other states have a more accessible and robust tax credit.
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J. Todd Harris is a film producer living in Los Angeles. His credits include “Bottle Shock,” “The Kids Are All Right,” “The Family Tree” and “Miss Nobody” — all shot in California.

I just wrapped an independent movie here in Los Angeles, a musical called “Lucky Stiff” from “Jeffrey” director Christopher Ashley. It’s a pretty expensive movie by indie standards, but the experience was a joy because everything we needed was here, with the best film professionals in the world available and eager to work. Eager? Nay, thankful. If there was one overriding sentiment expressed during our just-over-five-week shoot, it was how grateful everyone on the crew was to have a movie shooting at home in Los Angeles. Like so many productions these days, it would have been incredibly easy for us not to.

There were many reasons we chose Los Angeles, despite the fact that other states have a more accessible and robust tax credit. Even though the story takes place in Brooklyn, London, Atlantic City and Monte Carlo, Los Angeles has the best resources and personnel either to replicate those locations or to build the ones that weren’t here. Also, we knew we’d be able to access local actors for short stints more easily.

Once we decided to shoot here, about six months prior to production,we immediately prepared to apply for the California Film Commission Lottery, which would defray the cost of our picture by more than $1 million — a considerable amount when making a movie financed entirely by equity. But the application due date was June 1, and our start date was June 13.

I knew the California rebate is based on a lottery system, so there were no guarantees, but imagine my astonishment when I heard that we didn’t even qualify for consideration! Why didn’t we qualify? Although the due date for applications is June 1, you can’t start your production until 30 days after, so we were too early. But then it turns out thatyou have to start shooting within six months of June 1, too. Which means, effectively, that if your movie starts shooting in California between December 1 and June 30, you’re out of luck. No Spring-set rom coms need apply!

Furious, I wrote to Amy Lemisch, who heads the California Film Commission, to articulate my dismay and displeasure. To her credit, Amy quickly called me to explain that the system isn’t perfect and that they’re looking at ways to make the lottery more fair and comprehensive (possibly two deadlines six months apart). She also mentioned that the lottery really wasn’t designed for films like ours, which had already decided to shoot in California, but to persuade productions that were on the fence. And finally, she admitted that, given California’s budget crunch, the California Film Commission was happy just to survive with its existing budget, and she didn’t dare rock the boat by asking for more or tinkering with the system.

But the truth is that nearly 90% of the $100 million designated to stem runaway production is allocated to studio fare as it is, with only 10% going to independents. With the number of studio films shrinking every year, independent films of this size have become crucial to the talent pool here in California. What we don’t need is another obstacle to overcome.

"Crooked Arrows"

All of this got me thinking about “Crooked Arrows,” the movie I shot last summer in Massachusetts, where there are no such restrictions or lottery, the system is pretty user-friendly and there are several companies willing to cash-flow the tax credit during production, which came in extremely handy to our cash-challenged movie. Even though Massachusetts is not an inexpensive state to shoot in and doesn’t have the depth of crews that L.A. has (no place does), its substantial and readily available tax credit will certainly keep Massachusetts on my radar for future productions.

In 2013, I have at least two movies I hope to shoot in the U.S. One is a ski-racing movie, and the other is a Frank Lloyd Wright movie. The ski movie has many different locations it can choose from that have tax credits available – Utah, New Mexico, Wyoming and Massachusetts among them. Since I haven’t applied in California, and we’re looking at shooting in March, the prospects for producing it in-state – even with all the great possible places to shoot a ski movie (Tahoe, Big Bear, Mammoth) – are now remote.

The Frank Lloyd Wright movie really should be shot in Illinois, and possibly Wisconsin, even though there are states with more attractive incentives. But given that we were just able to recreate streets in Brooklyn, Atlantic City and London (thank you, Paramount back lot) here in Hollywood, as well as build or use sets that incorporate green screen at places like Red Studios, DC Stages and the Fonda Theatre, there are very few films for which I would rule out Los Angeles as a viable location. It would be a terrific boost if California could encourage independent films to stay in Los Angeles and avail themselves of its tremendous resources.

Although the economics of tax incentives can be elusive, I believe every municipality and state has a right to facilitate business for its homegrown talents. I’m glad California has mechanisms and funding to keep some production here. I applaud Amy Lemisch for fighting the good fight. But having just enjoyed, along with more than 100 other film professionals, sleeping in my own bed, seeing my family every day and accessing the best film crews and facilities in the world right here in L.A., I’d like to see the state make its incentives program fairer and more accessible to independent films, which increasingly fill the void in an industry dominated by major corporations focused primarily on tentpole pictures.

It’s not just nice for me to work close to home. It’s equally good for my home to get my business.

This article is related to: Filmmaker Toolkit, J. Todd Harris, Filmmaker Toolkit: Budgets





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