Section 181 Extension Bills Are Here: HR 2720/3931!

As predicted, Section 181 is back on the front burner now that the House passed a Health Care reform bill. HR 3931 and HR 2720 have made their way from introduction to Congress as Bills to the House Ways and Means Committee. 

HR 3931 seeks to extend 181 until the end of 2011.  HR 2720 goes well beyond a 2 year extension and looks to make 181 a permanent tax incentive  for qualified films. 

Obviously the Bills will have to move swiftly to make it to a vote before the end of the year, but this is great news for those film makers who were not quite ready to start a production in 2009. 

HR 2720 is simple and straight forward (not part of a large extender Bill (yet)).  Here is the text:

A BILL

To amend the Internal Revenue Code of 1986 to make permanent the election to treat the cost of qualified film and television productions as an expense which is not chargeable to capital account.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. EXPENSING OF QUALIFIED FILM AND TELEVISION PRODUCTION COSTS MADE PERMANENT.

Section 181 of the Internal Revenue Code of 1986 (relating to treatment of certain qualified film and television productions) is amended by striking subsection (f).

HR 3931 is also quite straight forward:

A BILL

To amend the Internal Revenue Code of 1986 to extend for 2 years the election to treat the cost of a qualified film or television production as an expense which is not chargeable to a capital account.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. EXTENSION OF TREATMENT OF CERTAIN QUALIFIED FILM AND TELEVISION PRODUCTIONS.

(a) In General- Subsection (f) of section 181 of the Internal Revenue Code of 1986 is amended by striking ‘December 31, 2009’ and inserting ‘December 31, 2011’.

(b) Effective Date- The amendment made by this section shall apply to qualified film and television productions commencing after December 31, 2009.

Follow the success (hopefully) of the Bill here and on http://www.govtrack.us/congress/bill.xpd?bill=h111-2720 and http://www.govtrack.us/congress/bill.xpd?bill=h111-3931

Music readers, this bill applies to you.  Money spent on a qualified music video (even internet productions) can qualify for the tax incentive under 181.  Search my site for other articles about Section 181. 

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5 comments

  1. Joe Gold

    I found this letter on the senate finance committee website. I believe it is referring to the Tax Extender Act of 2009 which includes section 181. The letter basically says they are not going to get it renewed before the end of the year, but re going to make it a top priority for January, 2010, and that if it passes (which it likely will) the measures will be retroactive to the 1st of the year so there will be no interruption in 181. Here’s the letter dated 12/22/09:

    http://finance.senate.gov/press/Bpress/2009press/prb122209.pdf

    • lawyer4musicians

      Joe, looks like you are correct. I am not sure what effect this will have on productions that are about to start. I will try to keep an eye/ear out for updates.

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