In the US, plans for a nationwide tax incentive for film and TV productions are taking shape. A cross-party group of MPs is working on a bill designed to support productions with a tax credit, initially set at 20 per cent of labour costs incurred. Under certain conditions, the rate could rise to as much as 30 per cent.

The plan includes additional incentives for, amongst other things, productions in rural areas, independent projects and productions that shift expenditure from abroad back to the US. Extensive expenditure spanning several US states is also to be taken into account. The draft bill is due to be tabled in Congress before the end of September.

A study commissioned by the Motion Picture Association (MPA) from Olsberg SPI examines the potential economic impacts of such a model. For the period from 2027 to 2035, it forecasts that a nationwide production incentive would generate additional production expenditure of 125.3 billion dollars and additional labour income of 133.1 billion dollars. According to the study, this could create around 143,500 additional full-time jobs per year in the production sector.

The study compares the potential effects with a scenario in which there is no nationwide incentive. The forecasts should be understood as economic modelling rather than developments that have already taken place.

Behind this initiative lies the growing competition for film and TV productions. US producers are faced with numerous international locations that are already using tax incentives to attract productions. A nationwide model would, for the first time, create a uniform incentive at US level.

It remains to be seen whether, and in what form, the bill will pass through Congress. Its proponents are hoping it will be passed after the mid-term elections scheduled for November.