Runaway Production has become an enormous issue for the Film and Television industry over the past decade.  Production companies have moved productions to other countries such as Canada, New Zealand and Australia to capitalize on cheaper labor and more attractive economic environments.  To combat this “run away,” the United States government enacted the American Jobs Creation Act of 2004 that included Internal Revenue Code 181.  Many other states have followed offering tax incentives and deferrals for productions filmed within their state.  Doc Middleton Productions LLC plans to take advantage of as many incentives available to the production of The Outlaw Doc Middleton.    

Tax Section 181

Section 181 permits a 100% write-off for the cost of certain audio-visual works, regardless of what media they are destined for (e.g., theatrical, television, DVD, etc.).  An individual or company who makes an investment into Section 181 qualified productions can take a 100% deduction of their investment against their passive income in the year their investment was made.  The deduction can also be made against active income should the investment be made by or through a widely held C corporation.

The Section 181 and State Programs benefit the tax credit investor, the producers, and the community by offering:

• 100% passive income deductions under the IRS Section 181 "American Jobs Creation Act" for both individuals and corporate tax payers
            -20%-30% in State Tax Credits (depending on state)
            -Economic Development
            -Job Creation
• Discount of future taxation from income under Section 199 for a Section 181 investment

US Tax Section 181 expires January 1, 2010, but it is widely thought that this bill will be extended by Congress.

For more information on this code please contact your personal tax advisor or contact the producers.