  Nyct Member Username: Nyct Post Number: 101 Registered: 01-2007 |
http://online.wsj.com/article/ SB121676821087175231.html great article. i apologize if it was posted somewhere already. | ||
Andylinn Member Username: Andylinn Post Number: 924 Registered: 04-2006 |
Interesting article. Two things: (1) The article seems to suggest that the state is PAYING movie companies 40% of their costs, which is simply not true. It is a tax rebate. (2) The article doesn't mention the original intention of not only bringing jobs here but getting "free" press / tourism. --- though I do agree that the movie bill has some flaws. | ||
Rjlj Member Username: Rjlj Post Number: 608 Registered: 11-2003 |
Andylinn, what are the flaws that you see with the bill? | ||
Thejesus Member Username: Thejesus Post Number: 125 Registered: 06-2008 |
Andylinn: One feature of the incentive is a 40% credit for certain production costs incurred in Michigan. Notice that this is a straight up tax credit, i.e. cash money, and not merely a tax deduction, which is applied against the Michigan Business Tax. | ||
Andylinn Member Username: Andylinn Post Number: 926 Registered: 04-2006 |
I'm wrong then, Jesus. Further explain. So a 40% tax credit is cash that can be used to offset incurred taxes? Or spent on anything? | ||
Thejesus Member Username: Thejesus Post Number: 126 Registered: 06-2008 |
You're not wrong since other features of the incentive package merely offer a deduction. But the major feature of the incentive is the credit for certain kinds of production costs. As an example, lets say I spend $100,000 on qualified production costs in Michigan. Under the 40% tax credit, I would receive a $40k credit from the state of Michigan for these expenses. Note, however, that this is to be applied against the MBT, so your tax liability has to be higher than that amount to receive the credit. i.e., if my MBT is lower than $40k, say it's $20k, then the maximun credit for which I am eligible would only be $20k. By contrast, if the 40% incentive were merely a tax deduction rather than a credit, then this would simply mean that I wouldn't pay any tax on 40% of my production expenditures, which would be much smaller that the $40K credit. | ||
Andylinn Member Username: Andylinn Post Number: 927 Registered: 04-2006 |
oh, ok, I see. So it is still purely a tax incentive, but MUCH more valuable than a tax deduction. Thanks for the lesson. | ||
Johnlodge Member Username: Johnlodge Post Number: 7735 Registered: 10-2003 |
I saw on the news this morning that an empty warehouse in Ferndale is now a film equipment rental facility. A Michigan native who had been out in LA opened it up, and now films can get what they need there instead of getting it from Chicago as they had been doing up until now. Cranes, lighting, etc. | ||
Richard_bak Member Username: Richard_bak Post Number: 95 Registered: 04-2008 |
Isn't there a minimum on the amount of qualified production costs in order to qualify for the credits? I heard $50,000. | ||
Eastsidedame Member Username: Eastsidedame Post Number: 412 Registered: 12-2006 |
This is a much better deal than many other states give. Geeeezzz...let's at least get film companies out of Vancouver. I hate it that US companies go there! Also, "Onthe405", Sodom was executed in Iraq...remember? LOL | ||
401don Member Username: 401don Post Number: 673 Registered: 11-2007 |
Toronto just completed phase 1 of what is basically the World's largest studio and production facility on the waterfront. Called Filmport, it's pretty much sitting empty due to the rise in Cdn. $ and incentives offered by Mich. and other states. | ||
Detrola Member Username: Detrola Post Number: 74 Registered: 02-2006 |
Johnlodge, There is no need to go to Chicago for any equipment. Detroit Power & Light in Farmington Hills and MidAmerica Cine Support in Troy are both full service grip and electric rental companies. Stratton Camera also in Farmington Hills is Michigan's only Motion Picture / HD camera rental house. Any equipment needed for commercials and or features can be rented from these long standing MICHIGAN companies. If one of these companies lack something a production needs they will buy it and or re-rent the item. The tax payers of Michigan should be concerned with outside companies Like Fletcher Chicago. Fletcher is a camera rental company in Chicago. They have a few shell offices in Michigan. They simply use the local address and ship the cameras in from Chicago. In this manner a production can spend their camera rental budget in "Michigan"and qualify for the incentives. I applaud anyone who wants to build upon the infrastructure needed to support the production that has come to town. The whole point is to bring business to Michigan companies and individuals. Companies like Fletcher are using Michigan tax dollars to take business away from Michigan companies. One would think that the Michigan Film Office would not let something like this happen. Surely they would not approve the application of a production using a out of state vendor with a local "front" office. I guess "Prince of the Motor City" most have slipped though the cracks. | ||
Lilpup Member Username: Lilpup Post Number: 4739 Registered: 06-2004 |
If the money is collected by a Michigan office then it's taxable in Michigan whether the equipment is stored here or not. | ||
Lefty2 Member Username: Lefty2 Post Number: 1574 Registered: 07-2007 |
This is a no lose for Michigan. Money is coming HERE and not being spent THERE. A total GAIN for Michigan. Why let other states take money we could get cheap. I am not a big fan of tax credits but this is a total money generator without money up front. | ||
Detrola Member Username: Detrola Post Number: 75 Registered: 02-2006 |
Lilpup, Perhaps you missed the snide nature of my closing comments. The situation with Fletcher is legal. They are a "Michigan Company". One with and office, phone and an employee. Legal yes, in line with the intent of the incentives NO. The Michigan Film Office and or state treasurer could step in as they did when they decided to deny incentive approval for commercials. Commercials are part of the original language of the incentive legislation. The State treasurer decided against approving commercials. A few that were denied had already been approved by the Film Office. There are sure to be lawsuits. My point was to shine a light on the reality of the situation. Taxpayers should be concerned about carpetbaggers like Fletcher. But then again the sheeple of Michigan will most likely stick with the herd. | ||
Dbest Member Username: Dbest Post Number: 108 Registered: 03-2007 |
Interesting that Depp is checking out a spot around Traverse City. The word is out and this is great PR for the state. | ||
Spartacus Member Username: Spartacus Post Number: 318 Registered: 07-2005 |
Thejesus- I think that you're dead wrong. I believe that filmakers are, in fact, being reimbursed for 40% of the money that they spend in Michigan. I would love to be corrected on this. This has to be one of the dumbest ideas I've ever heard of. | ||
Fishtoes2000 Member Username: Fishtoes2000 Post Number: 625 Registered: 06-2005 |
quote: With love, let me post this link. It's a tax credit. http://www.michigan.gov/filmof fice/0,1607,7-248--168008--,00 .html | ||
Spartacus Member Username: Spartacus Post Number: 319 Registered: 07-2005 |
Just because it is called a tax credit, doesn't mean that it is capped by the amount of tax that you pay. That is the difference between a credit and a deduction. Take the Federal Earned Income Tax Credit, for example. Nothing on that website leads me to believe I'm wrong. Every media account that I've read is consistent with my understanding. In fact, it wouldn't even make sense the other way. How would a company that came to Michigan and paid $100,000 owe MBT tax approaching 40% of what they spent? | ||
Mcp001 Member Username: Mcp001 Post Number: 3545 Registered: 11-2003 |
It's actually a refundable tax credit. Film in Michigan, get a check. | ||
Rob_in_warren Member Username: Rob_in_warren Post Number: 118 Registered: 11-2007 |
The rest of the world is incentivizing this industry, so why shouldn't we try to be competitive? If only our local manufacturing labor market understood the value of being globally competitive... | ||
Johnlodge Member Username: Johnlodge Post Number: 7778 Registered: 10-2003 |
Detrola, is Fletcher the company who opened the supply house in Ferndale? | ||
Thejesus Member Username: Thejesus Post Number: 135 Registered: 06-2008 |
"Just because it is called a tax credit, doesn't mean that it is capped by the amount of tax that you pay. That is the difference between a credit and a deduction." This is an incorrect statement. I believe you're confusing tax credits with government grants. The most common example of a tax credit I can give you is the Hope Lifetime Learning Credit. This credit reimburses college students for 20% of the first $10k they spend on tuition (so $2k max), but it is capped at your total tax liability, otherwise it wouldn't be considered a credit against taxes but rather it would simply be a tuition grant from the federal government. A deduction, otoh, just means you're not paying tax on X amount of expenditures. Using the example above, if the Hope incentive were a deduction rather than a crdeit, this would mean you could deduct $2,000 from your income tax, and assuming a typical student's tax bracket of 15%, you'd get ($10k * .20) * .15 = $300, which, as you can see, is far less than the credit. As for the Michigan film incentive, see below: "40% refundable tax credit against Michigan Business Tax (MBT) liability for qualified film or digital media pre-production, production, and postproduction costs incurred in Michigan. Alternatively could be claimed against Michigan income tax withholding tax liability." http://www.michiganfilmproduct ion.com/michigan_film_incentiv e | ||
Fishtoes2000 Member Username: Fishtoes2000 Post Number: 626 Registered: 06-2005 |
Another example is donations to 501(c)(3)s are tax deductible. Donations to qualified community foundations are tax credits. | ||
Fnemecek Member Username: Fnemecek Post Number: 2859 Registered: 12-2004 |
quote: Actually, the difference between a tax credit and a tax deduction is that a deduction reduces the amount of income that you're taxed against; a credit serves as payment towards the taxes that you owe. Whether or not the credit is capped at the taxes that you owe is the difference between a refundable and non-refundable credit. quote: First, you have two tax credits merged into one. The Hope Credit is a non-refundable credit of up to $1,650 per student for 2007. The Lifelong Learning Credit is another non-refundable credit of up to $2,000 per return. http://www.irs.gov/publication s/p970/ch02.html Other tax credits, however, are refundable. This means that if the amount of your credit exceeds the amount of your tax liability, the government will send you a check. Examples of a refundable tax credit would be the Earned Income Tax Credit or the Additional Child Tax Credit. id=96406%2C00.html,http://www. irs.gov/individuals/article/0, ,id=96406,00.html http://www.irs.gov/pub/irs-pdf /p972.pdf | ||
L_b_patterson Member Username: L_b_patterson Post Number: 344 Registered: 10-2003 |
On a related note, Ray Liotta was spied in Ferndale Last week. | ||
Spartacus Member Username: Spartacus Post Number: 320 Registered: 07-2005 |
Okay... to boil this down. It is refundable credit, so how much you paid in MBT is immaterial. The State is reimbursing film companies for up to 42% of what they spend in Michigan. | ||
Johnlodge Member Username: Johnlodge Post Number: 7795 Registered: 10-2003 |
Ugh, of course we get Liotta. Besides Goodfellas, his only decent role was in the video game Grand Theft Auto. | ||
Thejesus Member Username: Thejesus Post Number: 140 Registered: 06-2008 |
"Okay... to boil this down. It is refundable credit, so how much you paid in MBT is immaterial. The State is reimbursing film companies for up to 42% of what they spend in Michigan." If that's the case, then why does the link I posted specifically state that it is applied against the MBT? | ||
Rocknrollscientist Member Username: Rocknrollscientist Post Number: 156 Registered: 05-2005 |
In addition to Liotta, Michael Cera, Fred Willard, Steve Buscemi, Justin Long, and Zack Galifianakis were all in town to shoot "Youth In Revolt" in Ferndale for the past few weeks. They were shooting in two houses in the first and second blocks of Leroy just west of Woodward. (I have a couple of friends who live between the two houses) They've been filming all over the state, from what I hear: Interlochen, Traverse City, Saline. http://www.imdb.com/title/tt0403702/ (edit: posted wrong link) (Message edited by rocknrollscientist on July 25, 2008) | ||
Fnemecek Member Username: Fnemecek Post Number: 2861 Registered: 12-2004 |
quote: It's a refundable credit. The amount of the credit is applied against any MBT that the production company might have. If there's any credit left over once their tax liability is paid, and there almost always is, then the State of Michigan issues a check. | ||
Detrola Member Username: Detrola Post Number: 76 Registered: 02-2006 |
Johnlodge, No, Fletcher has nothing to do with the Ferndale venture. The camera rentals on Prince of the Motor City are most likely in the neighborhood of $20,000.00 a week. All of which is going back to Chicago. They are shooting on ARRI D-21 HD cameras. Even though there are no D-21 cameras in MI The local camera rental house could have had the cameras shipped in. That particular camera is very costly and the profit comes mostly form the rental of lenses and accessories. Most contributors to this forum have no idea how many of us make our living in this field. The incentive package has had an almost instant impact. I know several people that have already earned as much as they did during the entire fiscal year of 07. | ||
Hauntedbeat Member Username: Hauntedbeat Post Number: 62 Registered: 07-2007 |
You people will argue about anything. |
