Friday, September 11, 2009

Gov Bill Richardson Announces New Reporting Policy for Film Tax Credit Program; Tax and Rev Department Creates Special Unit to Handle Film

Press Release

SANTA FE – Governor Bill Richardson today announced that the New Mexico Film Office will implement a procedure to make public specific financial information related to the state’s film tax credit program. New Mexico offers productions a 25% credit for qualified New Mexico expenses, including salaries for local crew, facilities, lodging, construction materials, equipment rentals, and a number of other categories. In addition, the New Mexico Taxation and Revenue Department is in the process of creating a specialized unit to review and process film tax credit submissions.

“The tax credit program has helped establish New Mexico as a leader in film and television production and has brought the state thousands of jobs and billions of dollars in revenue,” said Governor Richardson. “The data provided under this new policy will give taxpayers a detailed look at what film companies spend to qualify for the credits.”

Since 2003, 127 major film and television productions have been made in New Mexico with a resulting economic impact of approximately $3 billion. In the state there are an estimated 10,000 direct and indirect jobs related to the film industry, and over 200 local film-specific businesses and services.

Production companies that request a tax credit will be required to provide the New Mexico Film Office with detailed information regarding the expenses submitted to qualify for the credit. Previously this data had only been provided to the New Mexico Taxation and Revenue Department where by law it must be kept confidential. Under the new policy, the film office will provide aggregate totals in specific categories for all film and television productions on a fiscal year basis.

“As a government entity, we have a responsibility to provide to our legislature and taxpayers information which substantiates our belief in the film industry as a major economic driver, and which meaningfully relates to the citizens and businesses of the state the benefits received in return for offering production incentives,” said Eric Witt, Governor Richardson’s Deputy Chief of Staff and Film Policy Advisor. “We believe this policy will protect truly proprietary industry information while fulfilling our fundamental responsibility to the people of New Mexico to provide meaningful, accurate data regarding these programs.”

The new film unit at the state Taxation and Revenue Department will consist of four auditors and a supervisor and is expected to be operating within the next month. The department is recognized throughout the film industry for its competence and professionalism. To continue to meet the agency’s high standards, the new staff will received specialized training in film production practices.

“Our auditors will talk the industry language, visit the sets and understand the complexity of the film and digital media business,” said Rick Homans, Secretary of the New Mexico Taxation and Revenue Department. “The goal is to be open and friendly to the film industry and, at the same time, maintain accountability and a clear set of rules and expectations.”

New Mexico’s success with its film incentives has received national acclaim and attention-now 42 other states offer some form of film incentives, many of which are at higher rates than New Mexico.

“The competition is growing, but New Mexico is still at the top of the list when productions look for locations,” added Eric Witt. “The fact is, we have one of the most trusted and respected film programs in the world. And most other states can’t compete with our talented crew base, world-class facilities, and spectacular, diverse locations.”