Friday, March 04, 2011

Puerto Rico Governor Signs New Film Tax Incentive Bill

Good to know that Puerto Rico is becoming a more significant player in the world of film and production. I hope more Puerto Rican filmmakers, actors and production crew members will be able to benefit.

Here's the press release:

Program Provides Additional Tax Credits, Expands List of Eligible Projects and Creates Infrastructure Incentives

The Governor of Puerto Rico, Luis G. Fortuño, today signed into law the Economic Incentives for the Development of the Puerto Rico Film Industry Act, a bill that is designed to make Puerto Rico’s current production incentives among the most attractive in the industry, as well as promote the development of state-of-the-art media infrastructure, including high-capacity studios. It also designates the media industry as one of the core sectors of the Governor’s ambitious economic development platform.
Under the new law, the government of Puerto Rico has created a series of new incentives and expanded current ones. They include expanded lists of eligible projects, higher caps on existing incentives and new incentives for the development and operation of production facilities on the Island. The new law will be overseen by the Department of Economic Development and Commerce and the Puerto Rico Film Commission.
“Puerto Rico already offers some of the most aggressive tax incentives in the world, making the Island an important center for a number of industries, from biosciences to aerospace. This ambitious bill will place the media industry on an equal footing with others, both with regard to production and the development and operation of related infrastructure,” said Secretary of Economic Development and Commerce, José Ramón Pérez-Riera. “Puerto Rico is known for its variety of locations that can substitute for almost anywhere in the world. It also has U.S. trained crews, artistic talent and state-of- the-art equipment.”
Among the highlights of the new law:
The legislation expands the list of eligible projects to include feature and short films, documentaries, television programs, including series in episodes, miniseries and pilots, music videos, commercials, videogames, recorded live events and original sound track and dubbing recordings. The minimum spending requirements for all eligible projects have been simplified, and the amount has been reduced to $100,000 in payments to residents of Puerto Rico. There is an exception for short films, which will be subjected to a $50,000 minimum requirement. Principal photography requirements are eliminated.
The legislation expands the current 40 percent production tax credit on payments to Puerto Rico residents to include payments to non-resident talent, subject to a reduced 20 percent rate.
The legislation also raises the annual cap on tax credits from $15 million to $50 million on payments to Puerto Rico residents and may be expanded up to $350 million. Credits generated by payments to non-resident talent are not capped. There are no individual or per project caps.
Complementing and enhancing Puerto Rico’s production offering, the legislation provides incentives for the development, construction and operation of state-of-the-art production facilities. The legislation raises the existing infrastructure tax credit to 25 percent on all costs related to the development or expansion of studios, laboratories and other related facilities. It also offers favorable tax treatment to studio operators and related businesses including a fixed income tax rate of between 4 percent and 10 percent, as well as a 90 percent to 100 percent exemption on all other state and local taxes.
Over 60 productions have taken advantage of Puerto Rico’s current incentive program, including Disney’s “Pirates of the Caribbean 4,” Universal Picture’s “Fast 5” and Warner Brothers’ “The Losers,” in addition to a variety of independent films such as “The Rum Diary,” starring Johnny Depp, “The Men Who Stare at Goats,” starring George Clooney and “Che”, starring Puerto Rican-born actor Benicio Del Toro.
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