Washington, D.C.--Today, Rep. Diane Watson introduced H.R.3931 which would extend expensing provisions for qualifying film and television productions. The principal focus of this legislation is to decrease "runaway production" and allow certain production costs to be written off as a deductible expense. H.R. 3931 requests an extension of IRS Code Section 181 until 2011. The current extension expires on December 31, 2009.

"These tax credits were extended in October 2008 as part of the Emergency Economic Stabilization Act of 2008. However, they were set to expire on December 31, 2009." stated Rep. Watson. "These provisions create greater revenue than the cost of the tax credits. If this IRS write-off is allowed to expire, film and television productions will likely choose to film in cheaper locations abroad, resulting in a major loss of revenue and jobs for the 33rd District, the state of California, and the country."

H.R. 3931 requests an extension of the amendment to Title 26 of IRS Code Section 181. This amendment permits the owner of a qualified film or television production to elect to deduct production costs in the year the costs are paid or incurred in lieu of capitalizing the costs and recovering them through depreciation allowances if the aggregate costs do not exceed $15 million for each qualifying production ($20 million if a significant amount of the production costs are incurred in certain designated areas). A film or television production is a qualified film or television production if 75 percent of the total compensation of the production is compensation for services performed in the United States by actors, directors, producers, and other relevant production personnel (the “75 percent test”).  

"As Chair of the Congressional Entertainment Industries Caucus, I strongly believe that this extension that will stimulate additional investments in film and television production made in the USA, " said Rep. Watson. "Moreover, qualified productions filmed in low-income areas of Los Angeles will be allowed a deduction ceiling that is one-third higher than elsewhere. This will create jobs and opportunities which are sorely needed to help stimulate our economy."

For additional information on IRS Code Section 181, please go to http://www.irs.gov/pub/irs-regs/td9312.pdf