DEAL
2:23 PM PDT 06/29/2020
by
Eriq Gardner
A letter sent to Congress Monday by the Motion Picture Association, SAG-AFTRA and other groups calls for hiring incentives, changes to the tax code and a new federal insurance program.
As COVID-19 cases continue to rise dramatically in many states, including California, Hollywood demands that federal lawmakers step forward with new legislation to help save the entertainment business. In a letter sent to congressional leaders Monday, prominent industry groups have outlined hiring incentive policies for a federal insurance program they would like to see enacted.
“These policies would help boost national film and television production, encourage hiring, and improve the higher costs that must be incurred to protect our industry’s workforce,” said the letter signed by the leaders of the Motion Picture Association. , the Directors Guild of America, the Independent Film & Television Alliance, the International Alliance of Theater Stage Employees and SAG-AFTRA.
The specific call comes as lawmakers prepare to debate a third major COVID aid package. Previously, the CARES Act provided direct payments to Americans earning below a certain income, as well as forgivable loans to small businesses, among other facets.
This time, entertainment groups are supporting broad incentives for employers to hire workers. They say job opportunity tax credits should also be available to employers who rehire workers who have previously worked for them.
The letter to federal lawmakers, obtained by Hollywood reporter, also includes targeted proposals that would be of particular benefit to the entertainment sector. For example, legislators are asked to modify an aspect of the tax code related to national production. Under Section 181, any production that meets certain basic qualifications can deduct the first $ 15 million of the cost against federal tax obligations. A discarded idea is that this section expands with the limit changing to $ 15 million or 50 percent of total production costs, whichever is greater. Another option deals with Section 168 (k), a full expense allowance for bonus depreciation that will be phased out over the next few years. The entertainment industry puts this part of the tax code on the table with proposed modifications, such as allowing production costs to be deducted as they are incurred (rather than when movies are shown), removing a 44-episode limit for production. television and allowing the application to the acquisition of so-called “used” movies.
The goal would be to inject liquidity quickly into the business.
Additionally, SAG-AFTRA and other industry groups are interested in allowing performers to deduct their own unreimbursed employment expenses. At the moment, the tax code allows this only for low-income workers ($ 16,000 or less), but the letter says: “We ask Congress to pass the Performer Tax Parity Act (HR 3121), which will increase the limit maximum income of $ 100,000 for individual taxpayers and $ 200,000 for joint taxpayers. “
Perhaps the biggest proposal relates to applying for a new federal insurance program to cover losses related to the pandemic. Although the letter does not go into detail, it does establish a broader conversation.
“Our industry’s ability to return to active production, whether on-set or on-site, is severely compromised by the inability to purchase insurance to cover losses from communicable diseases among the cast, crew and others involved in production, “states the lyrics. “This insurance has been available in the past and is essential to the decisions of banks and others to risk investing in a movie or show that may be closed while a single cast member recovers from illness or as a result of an order from civil authority unrelated to specific production. Without it, production, especially independent production, cannot resume at a significant level. We urge Congress to develop a federal insurance program (or guarantee to fill this gap) to cover the future pandemic-related business losses. “
