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Free money for moviemakers, but little in Colorado

Tax credits and other incentives lure out-of-state creative talent

Cathie Beck //March 10, 2017//

Free money for moviemakers, but little in Colorado

Tax credits and other incentives lure out-of-state creative talent

Cathie Beck //March 10, 2017//

Everyone wants free money and Colorado filmmakers are no exception.

Because filmmakers want funding to make their films – and state governments motivate filmmakers to spend production dollars in their borders – incentives were born into the movie industry about 25 years ago.

Production incentives are tax benefits offered on a state-by-state basis, ranging from credits and exemptions to cash grants, fee-free locations and more.

A tad late to the party, Colorado passed 2011 legislation that allowed qualified Colorado filmmakers to receive 20 percent of their filmmaking expenditure in a cash refund. "Qualified" would turn out to be the operative (often confusing and laborious) word.

Roughly 90 days to six months before to shooting a film, the state wants the filmmaker funded and ready to go. A pre-application is then needed to begin the process.

Generally, a minimum spend of $100,000 is required for Colorado production companies or $1 million for out-of-state companies. Once approved, the state issues filmmakers a letter of approval.

Details include:

  • At least 50 percent of the cast and crew have to be Colorado residents.
  • The rebate only applies to "qualified expenses," which can include employee labor costs, location fees, script fees, travel, post production costs and the like.

Once the filmmaker has finished the $100,000 production spend, a CPA must vet the numbers and sign a letter of compliance on behalf of the filmmaker. Approximately 45 days after that passes with the Office of Economic Development and the Colorado Film Commission, the filmmaker gets a check.

Colorado put $3 million into the pot for the 2016-2017 fiscal year, which may sound like a lot, except if the movie maker went to New Mexico there's a $40 million film incentive pot to draw from. Louisiana's budget is $180 million and filmmakers can get 30 percent of their expenses reimbursed, all of which illustrates how varied states are in encouraging this form of economic activity.

The list of pros and the cons that make film incentives continuously controversial grows each year.

Advocates of these programs point to job creation as justification for state’s film and television specific enticements. On the other side of the coin, that money can go to primarily to out-of-state talent, rather than local cast and crew members. Reports on the costs and benefits of incentive programs show varying levels of effectiveness.

Then there's the whole political aspect of who should receive the limited funds allocated to filmmaking. Some want the big guns to film in Colorado. Disney as an example, brought Quentin Taratino's "The Hateful Eight" to Colorado in 2015.

Tarantino got all $5 million of Colorado’s budget when he filmed the movie near Telluride.

Independent filmmakers who don't command the same audiences or box office receipts of major Hollywood types can and do resent already deep-pocketed outsiders reaping all the benefits of the program.

Colorado has a rich film and television history.

"Diagnosis Murder," "Father Dowling" and most recently "Perry Mason" episodes were shot in Denver. "Dumb & Dumber," "Thelma & Louise," "City Slickers," "Indiana Jones and the Last Crusade, and "Butch Cassidy and the Sundance Kid" are all but a tiny slice of Colorado's filmmaking history.

But will that movie magic continue?

It is hard to say.

It's hard to know whether financial incentives really do benefit the communities where the movies are made and it’s obviously challenging to know if a $3 million incentive pot is too much, too little or just right to stimulate the local economy.

All I know is that as long as someone offers production incentives that help attract productions to the state and help me get my movie made, I'll be applying … Because everyone wants free money. Especially filmmakers