Quadrupled tax credits may boost filming in islands
A new law may bring more productions here
By Tara Godvin
Associated Press
Hawaii might soon need to prepare for some more enchanted evenings, amnesiac lovers and ragtag plane wreck survivors after Gov. Linda Lingle signed a law that nearly quadruples the tax credits offered by the state to film and other media projects in the islands.
Known as the backdrop for "South Pacific," "50 First Dates" and currently the hit TV show "Lost," the islands have lost out on high-profile productions in recent years, in part due to the state's unwieldy system of tax credits for productions.
Among recent film projects to have considered Hawaii but gone elsewhere were Clint Eastwood's "Flags of Our Fathers," which went to Iceland, and the latest two installments of the "Pirates of the Caribbean" franchise, which filmed in the Caribbean, said Donne Dawson, Hawaii's film commissioner.
However, as of July 1, productions that come to Hawaii will have access to new tax credits equal to 15 percent of their expenditures on Oahu and 20 percent on the neighbor islands, with a cap at $8 million per production. That's a significant increase from the state's current offering of up to 4 percent on spending and a rebate on the state's 7.25 percent hotel room tax.
The new law brings Hawaii more in line with the nation's other film-friendly states, such as New Mexico, which offers a 25 percent rebate and zero percent-interest loans on productions. Last year, that state hosted such productions as "Brokeback Mountain" and "North Country," as well as a feature film that had passed over Hawaii because of its lack of incentives, Adam Sandler's "The Longest Yard."
"There are a lot of people in the industry that have been watching this very closely for several years. And I think there's a lot of excitement building now because projects that have been in a holding pattern are now talking about wanting to come here ... because of the new credit," Dawson said.
Last year film projects spent $100 million in the state. Dawson said she hopes the new credit will bump film expenditures in the state back up to its all-time high in 2004 of $161 million.
A similar tax credit package had failed to pass the Legislature last year. And the issue became a touchy subject with lawmakers after the 2002 surfing movie "Blue Crush," which had a budget of $41 million, received at least $18 million in tax rebates under the high technology tax credit known as Act 221.
The state has long since tightened the criteria for qualifying for that credit, Dawson said.
But that credit, which offers 100 percent back for each investor on a project up to $2 million, has remained the most-used credit by productions, rather than the state's 4 percent credit, she said.
The state provides about $28 million in film project tax credits each year, including about $23 million in Act 221 credits.
The problem is that the high tech credit is difficult to use -- including a need for projects to find local investors -- which makes it harder for film projects to know for sure how much help they can count on from the state, Dawson said.
"An incentive is only as valuable as it is easy to access," she said.
The new law would not allow productions to use both the new, larger credit and the old high tech credits.
"We didn't ask for money. We basically asked to amend the bill and hopefully (take) the pressure off of 221," said Brenda Ching, executive director of the Screen Actors Guild in Hawaii.
Ching, who is also chairwoman of the Hawaii Film and Entertainment Board, helped lead the local film industry effort to get the credit increase through, which included a petition with more than 400 signatures.
"It's going to hopefully generate more work for ... everyone, anyone in the industry and have that trickle effect," she said.