Tax Benefits

Section 181: Myth and Reality
The American Jobs Creation Act of 2004, as amended from time to time, (the “Act”), which took effect October 22, 2004, included a “new” Internal Revenue Code section 181. The expressed purpose of the Congress was to provide an incentive to certain film makers and television producers not to move their production activities outside of the United States by providing new income tax incentives for investors in independent film and television projects.

Prior to the passage of the Act, applicable law required all film makers and television producers to capitalize all production costs in accordance with Code Section 263A. Section 181, as last extended in December 27, 2020 under the Trump Consolidated Approve Act, provides that with respect to film and television productions which started production between January 1, 2019 and January 1, 2026, film makers and television producers have the option to either capitalize the production costs or to expense any and all “qualified film or television production”, up to a maximum, regardless of the size of the budget, of Fifteen Million Dollars ($15,000,000).

Tax Benefits

Movie camera