Lingle proposes raising
film tax credits
Moviemakers would be able to recoup as much as 20 percent of their production costs -- up to $2 million -- when they film in Hawaii, under a Lingle administration bill taken up by two Senate committees yesterday.
The proposal would increase the existing 4 percent tax credit that filmmakers can claim to 15 percent for costs incurred on Oahu and 20 percent for production costs on other islands. Producers of television commercials and print advertisements also would be allowed to claim the tax credits.
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The measure is an attempt to compete with other locations such as Canada, Australia, New Zealand and Mexico that offer significant incentives to moviemakers, said Ted Liu, director of the state Department of Business, Economic Development & Tourism.
"DBEDT believes that in order for Hawaii to regain a competitive edge that our government must take the initiative to improve upon the incentives we now currently offer," Liu said in testimony to the Senate committees on Economic Development and Science, Art & Technology.
Among those opposed to the measure was the Tax Foundation of Hawaii, which called the credits nothing more than "a giveaway of state funds."
"If lawmakers want to subsidize the film industry in Hawaii, then a direct appropriation of public funds is more accountable and would subject that expenditure to public scrutiny," the foundation said in its testimony.
Committee members took no immediate action on the bill, which also sets specific requirements for producers seeking to claim the credits.
The production would have to spend at least $200,000 in Hawaii and at least 25 percent of "below-the-line" hires, such as unit production managers, location managers and script supervisors, would have to be state residents.
Also, productions financed with the help of the state's high technology tax credit known as Act 221 would be ineligible for the additional credits. The bill had the support of neighbor island officials.
"At this time, we feel it is critical for the neighbor islands to have substantial support in order to help grow their infrastructure and become a true partner in the growth of Hawaii's film industry," Big Island Film Commissioner Marilyn Killeri said in written testimony.
