Tuesday, October 27, 2009

New Accounting Rules for the New Mexico Film Incentive Program

by crewnewmexico.com
On September 11, 2009, Governor Bill Richarson's officecalculator announced the introduction of a new program to help provide greater transparency in the New Mexico Film Incentive process. In light of some recent abuses of incentives in Iowa, these come at a newsworthy time.

New Mexico has the most trusted and stable incentive program in the country, and these new changes show the confidence we have in our current procedures.

Under the new guidelines, 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.

By providing aggregate totals, proprietary industry information will remain confidential while still providing the public greater insight into how the tax credits are being applied, and to show the validity of the credit requests.

To enforce the new rules, the New Mexico Tax and Revenue Department is creating a new film unit consisting of four auditors and a supervisor who will receive specialized training in production practices and terminology.

Says Rick Homans, Secretary of the New Mexico Taxation and Revenue Department, "Our auditors will talk the industry language, visit the sets and understand the complexity of the film and digital media business. 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.

The reporting categories are as follows:

1. Total dollar amount spent in New Mexico (including NM labor)
2. Total dollar amount spent in NM on:
a. NM Crew (all NM crew: director, producers, writer, technical crew, security)
b. NM Talent (principals and background)
c. New Mexico facility/property rental: stage space, production office, location fees
d. NM lodging/accommodations
e. NM food (catering, craft service, other)
f. NM rental vehicles/non-film vehicles
g. NM "rolling equipment" rentals (trucks, trailers, cranes, picture cars)
h. NM film equipment rentals (grip, lighting, camera, other)
i. NM construction costs (lumber, hardware, supplies, other)
j. NM set dressing
k. NM wardrobe
l. NM special effects/props.