The Rhode Island Film Tax Credit, under Rhode Island General Laws 44-31.2, is a contentious statute. The law provides for a fully transferrable tax credit equal to 25% of all Rhode Island spending for any TV or film project with a minimum budget of $300,000. "Rhode Island spending" also includes the salaries of any actors, actresses or other film crew who are not Rhode Island residents.
The Rhode Island Legislature created the tax credit to follow dozens of other States that have created such laws to encourage filming within the State. The laws preamble states that Rhode Island is uniquely suited due to our natural landscape and resources, diverse populations, varied climates and historic towns to provide settings for the film and TV industry. The State wants to tap into the billions of dollars that the film and TV industries produce each year while creating jobs and boosting tourism by highlighting the many benefits of Rhode Island. A great idea and, in my mind, a great law.
The film tax credit is incredibly valuable to film and TV producers and I believe that it will continue to draw business into the State. A film that I am currently working on as lead counsel, has generated a loan based on the projected film tax credit. This loan has been invaluable in putting together a budget to make the film. Quite honestly, the film, which happens to be produced by Rhode Island natives, might never have been greenlit without the Rhode Island film tax credit. Similarly, production companies can sell the tax credit (usually for 90-95% of the total value) to outside companies and take that money to help recoup the massive cost of producing a film or television project.
The Rhode Island film tax credit is nevertheless contentious. Many argue that the credit is so favorable that Rhode Island makes no money off of productions filmed here. In truth, some projects have started in Rhode Island to take advantage of the credit only to be pulled shortly thereafter back to New York or California. It is frustrating that Rhode Island has not become the Hollywood of the east that this film tax credit promised. Rhode Island, however, particularly Newport and Providence, have booming tourism industries which may be in part to greater global recognition and the few projects that have been filmed in the State have created hundreds of jobs (albeit temporary) for Rhode Islanders.
Film tax credits are contentious in other States as well including New Jersey which has a similar law. Just today there is a story about the New Jersey Governor attempting to pull the tax credit from the reality show "Jersey Shore" because he feels the show paints the State in a negative light, which is the exact opposite reason why laws like this are created. I personally do not think that the Governor can make such a step unless their film credit statute has some form of quality or morality control. Otherwise, there is no basis to deny a credit to a show simply because you do not like it.
If you are a TV or film producer looking to make a feature length film or a music video contact my office for a free consultation. I can help you understand and work with the Rhode Island Film Tax credit while you get your project underway.
