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There is an "economic development bill" that has been posted in committee in the Kentucky State House of Representatives that has language buried in it that would, in effect, create a Kentucky giveaway to movie production companies in the form of refundable state income tax credits. In effect, since these are refundable, they would basically amount to Kentucky paying movie production companies to come here and film movies, even though the effects of these types of credits is questionable at best. The newspaper articles I have researched on this from other states have portrayed these types of credits as hit or miss, with a few states benefitting, but documentation is so questionable, it is unknown if there is a REAL benefit and that money is staying in those states.
What really gets me is that Kentucky already offers a full refund of the 6% sales and use tax here to these types of productions! And the kicker here is that "The program requires no interim statements or expenditure minimums." (copied directly from the Kentucky Film Office's website). What qualifies in Kentucky for a full refund of the 6% sales and use tax?
"Typical production company expenditures subject to Kentucky sales and use tax include accommodations, meals, production equipment rentals and purchases, set construction and rigging materials, production office equipment rentals and purchases, utilities, and prop and wardrobe rentals and purchases."
So....basically anything, and the only requirements are:
1. An eligible production company should file a one-page registration form with the Kentucky Revenue Cabinet during the preproduction phase. This report must:
* Estimate production dates.
* Estimate local production expenditures.
* Name a representative to maintain expenditure records and to file the refund application.
* Provide the state with the Kentucky address for maintenance of expenditure records .
2. Only expenditures subject to Kentucky sales and use tax and purchased with a check drawn on a Kentucky financial institution qualify for the refund. Petty cash purchases made from a fund established by a check drawn on a Kentucky financial institution and accompanied by vouchers or receipts also qualify.
3. Within 60 days after the completion of filming, the company must submit a one-page refund application, accompanies by an expenditure report.
4. The state expects to process most refunds within 60 days after the receipt of the application and expenditure report from the production company.
Source: http://www.kyfilmoffice.com/taxrebateinf
So we will basically consider bending over backwards and not only giving them the 6% sales and use tax back, but now we are considering allowing them a fully refundable tax credit on income taxes? This portion of the bill should be named "Catch Me If You Can", because it surely is about a fraud being perpetrated against the good citizens of the Commonwealth of Kentucky. We are currently staring down a double barrelled shotgun with a projected $456 million dollar state budget shortfall and an ever widening financial crisis, and they want to propose throwing away money hand over fist to movie production companies?
Yet, my bill, aimed at benefitting the deaf and hard of hearing citizens of this state by requiring captioned movies to be shown in multiplexes with 5 or more screens is struggling to even get a HEARING in committee because lobbyists for the industry have gained the ear of certain lawmakers and befuddled them with misleading propoganda.
Their "economic development" bill would open the door to potential graft and abuse, such as what was being investigated in Louisiana by the FBI (read this link) http://blog.nola.com/times-picayune/2007/0
Or to budget-busting refunds on behalf of the state, such as what is happening in Rhode Island (see this link):
http://www.projo.com/news/content/film_c
For more information on your respective states, if you are not a Kentucky resident, please visit the link shown below for a summary by state of what taxpayers across the nation are giving to movie studios in an effort to draw them to their states. There was even a provision (since deleted) in the economic stimulus bill that would have given the biggest Hollywood studios $240 million worth of tax breaks. I'm not so sure the biggest crooks reside on Wall Street, since Hollywood appears to be attempting to dip their cup into the trough of the American taxpayer rather plentifully as well. Often times, it appears the potential benefits to the states are outweighed by the benefits given to the studios.
http://www.badgerguide.com/filmincentive
An outstanding analysis of Hollywood's attempts at robbing the bank is provided by an article in the LA Times over a bill that was presented in 2005-2006 in the legislature in California, You can read the article at this link:
http://www.iatselocal80.org/News/industr
Kentucky residents, it is time to contact your state elected officials in Frankfort and tell them to vote NO on this bill (HB 229), or to table it for future discussions so we can ensure we do not get snookered into paying out more money than we take in when film companies come to Kentucky. And PARTICULARLY if your elected officials are co-sponsors of this bill. The sponsor and co-sponsors of this bill are Democrats Tommy Thompson, Ruth Ann Palumbo, and Mike Denham, and Republicans David Osborne and Sal Santoro. Let them know if film companies want to come to Kentucky and get paid, they should be willing to pay for more of their movies to be captioned, and should get on board and champion greater movie access for the deaf and hard of hearing all across the country. A good start is by supporting the House and Senate bills here (SB 10 and HB 103) to open greater access for deaf or hard of hearing Kentuckians to the movies. After all, with all the money they would be getting, I think they could afford captions.
Brother, can you spare a dime? And so it goes.....
Eddie
