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