Film industry financial incentives.

09LSO-0290.L1

                                                         

FISCAL NOTE

 

FY 2010

FY 2011

FY 2012

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase:

 

 

 

GENERAL FUND

6,300

6,600

6,900

LOCAL SOURCES FUND

5,600

5,900

6,200

 

Source of revenue increase: Sales and use tax collected on expenditures made by film production companies on small film projects.

 

Assumptions:

 

Key Assumption: We have assumed in this estimate that there would be the equivalent of one additional small film project per year.

 

1) Fifty percent (50%) of a small film production’s qualifying expenditures are subject to sales and use tax (average of 5.3%):

 

                                   FY2010         FY2011          FY2012

Qualifying expenditures

  Small film project #1         $  450,000      $       -       $       -     

  Small film project #2         $       -       $  472,500      $       - 

  Small film project #3         $       -       $       -       $  496,125

Total qualifying expenditures   $  450,000      $  472,500      $  496,125

 

Qualifying expenditures subject

to sales and use tax (est. 50%) $  225,000      $  236,250      $  248,063

Sales and use tax (average 5.3%)$   11,900      $   12,500      $   13,100   

 

2) Qualifying expenditures for small film projects are assumed to occur within a fiscal year. Assumed a frequency of one small film project every year.

 

3) Qualifying expenditures for a small film project was based on average production costs of $200,000 (low end) and $700,000 (high end). Qualifying expenditures for small film projects #2 and #3 assume a 5% inflation rate over the previous year as follows:

 

     Small film project #1      $450,000

     Small film project #2      $472,500

     Small film project #3      $496,125 

 

4) Percentage of film production qualifying expenditures subject to sales and use tax (see 1 above) is based upon production costs for “Starship Troopers” filmed in 1996 in Wyoming.

 

5) Assumed an average sales and use tax rate in the state of 5.3%. Assumed allocation of sales tax of 53% to the General Fund, 47% to local governments.

 

Prepared by:   Diane Moser, WBC   Phone: 777-2848