NORTH CAROLINA
Effective October 1, 2009, the Department of Revenue has amended the regulations to provide that the following are exempt from sales and use tax: sales to motion picture firms of cameras, film and props or building materials used in the construction of sets that are used in the actual filming of movies for sales, lease or rental; and sales of chemicals and eqipment used to develop and edit film that is used to produe release prints. Previously, the regulation provided that such sales were taxable at the rate of 1%.
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PROPOSED LEGISLATION (Still in the House or Senate)
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NEW JERSEY
New Jersey has introduced two bills both of which would enhance the current film production incentive program.
The first bill: increases the incentive from 20% to 40% of qualified spend; makes the tax credit refundable; increases the annual program cap from $10 million to $50 million per year beginning with the 2010 fiscal year; removes the language limiting the the tax credit to 50% of the taxpayers tax liability; and, eliminates the limitation that excludes productions featuring news, current events, weather and market reports or public programming, talk shows, game shows, sports events, award shows or other gala events. To qualify for this incentive, 50% percent of the total film production expenses, exclusive of post-production costs, must be incurred for services performed and goods used or consumed in New Jersey.
The second bill generally mimics the existing law but it does increase the annual program cap from $10 million to $50 million per fiscal year.
Both bills propose to increase the annual program cap from $5 million to $10 million for the digital media production tax credit. Also, an additional 2% may be earned on the film production tax credit for eligible production expenses if the expenses represent purchases of goods from businesses located in Urban Enterprise Zones (UEZ) or purchases of services performed by residents of a UEZ.
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