Bad news. Section 181 seemsto be cursed. A better explanation is that the extension is linked to a huge political battle over extending unemployment insurance. Washington at its best. Read more here. http://www.opencongress.org/articles/view/1921-Dems-Lose-Big-on-Unemployment-Insurance-Tax-Extenders-Vote.
Originally Published on May 29, 2010
The House voted to pass HR 4213 with some minor revisions and amendments. After passing the House and the Senate earlier this year, Congress could not present the bill to the President until proposed changes (which likely means more pork was added) were debated. Thankfully for film makers, an extension of Section 181 through December 31, 2010 remained as part of the bill without any modification. The extension will permit films that were or are being produced in 2010 to utilize the tax deduction.
Even though it still looks like we are on the right track (which we have been for about 6 months), Congress adjourned for a week long holiday. So the Senate and President will not see this Bill until at least June 7.
Obviously, this extension will be great news for everyone associated with making movies in the United States. To find out more about Section 181 or to figure out how it can help with your film’s money raise, please feel free to contact us at josh@lawyer4musicians or firstname.lastname@example.org. Remember, HR 4213 is not a law yet (not until the President signs it) and this blog does not contain legal advice upon which you may rely. Thanks to all readers who help us stay on top of this and correct any misinformation that is out there.
The answer, as of what we know, is not yet. Rumors continue to run wild, but according to the Speaker of the House’s Office, the Senate’s Committee on Finance and the record of Congress activity for today, May 11, 2010, there were no applicable votes on Section 181 or any Bill which includes the provision.
Our friend at Facebook: Extend Section 181 may have started this rumor, and I hope it is actually becomes fact, but we just simply cannot confirm any sort of extension yet. Keep checking here for updates.
We spoke with the Senate Finance Committee today and unfortunately, the wait for Section 181 passage continues.
According to the Committee which spearheaded the most recent Tax Extender Bill of 2009 (HR 4213) that passed the Senate had substantial differences from the original bill passed by the House. Accordingly, the bill has to be “re-introduced” to the House. I am not sure of the next steps or a time-line for those steps.
So again, while it looks promising, the extension is not law yet.
If you have questions about the legal steps necessary for raising money for your film or music video, please feel free to contact us.
The hangover from SXSW has subsided and deals are actually getting done in the world of both music and film. There are several hot topics which are been written, blogged, tweeted and plain old talked about in the music and film industry. Over the next several entries we will try to explore several of those topics.
A new contributor to L4M, Mr. Eric Malnar will update everyone on the public performance royalties debate that is garnering attention from the House, Senate, White House and musicians all over the world. We will also explore what is a standard 360 deal these days and continue to share our experience of working with musicians (both label musicians and independents) in the ever changing industry.
On the film front; just when I thought it was safe to celebrate the passage of Section 181…President Obama seems to have lost the legislation somewhere between health care reform and his next pack of Camels. We are still waiting for his signature on H.R. 4213 and eager film makers are anticipating the one year extension that should have come on January 1, 2010. In other film news, state tax incentives are ever changing so we will try to keep you up to date on the best places to film. Plus, we will walk the newbie film maker through the process of raising funds for an independent movie by explaining all of the paper work (stupid lawyers) that is necessary before you can even accept a check from your mom.
SHAMELESS SELF PROMOTION OF THE WEEK:
One thing I take a lot of pride in is introducing talented people to other talented people. As a lawyer for creative people, I am able to make introductions to some gifted artists which then results in some pretty cool stuff. I always tell my clients to view us as a resource; whether it is introducing managers to artists, labels to artists, licensing companies to advertisers or musicians to other musicians, our clients end up with the same contacts and connections as we have.
Possibly the best example is this song. Our clients, Database, French Horn Rebellion and Hey Champ collaborated to bring you a Remix of Beaches and Friends. The song is doing great on a worldwide level. Enjoy:
More than three months after the House passes a version of the Tax Extender Bill of 2009 (HR 4213), the Senate got off its collective rear end and passed a modified and heavily pork filled version of the Bill today. By a vote of 62 to 36 this persistent piece of legislation made it one step closer to becoming law (remember it still needs the President’s signature). Of importance to all of us, the Extender Bill contains a one year extension of Section 181. All film makers and investors may now breathe a collective sigh of relief.
Now that the extension is a whisker away from becoming law, all you film makers can start approaching investors and their confused accountants to tout the extradorinary tax incentive that is Seciton 181. Remember the tax dedcution that 181 offers is against passive income (although there are subtle nuances that allow active investors to take the deduction against active income). Also, musicians, videographers, web casters, 181 can be used for all qualifying films; which is to say it is not just for feature length films.
We at L4M routinely work with film makers in planning and drafting their film investment documents. Now with the help from our intrepid Senators, we can once again add language to these documents regarding Section 181 (and State tax credits) that make film investment a bit more attractive.
Now that 181 has passed, stay tuned for other development in film and music law. Thanks for reading and for all of your input.
The Senate is set to get back to work on Tuesday, January 19, 2010. After the MLK holiday, the Senate Finance Committee, based on its press release and the staffers’ opinion, the Tax Extender Bill will be debated. Of ultimate importance to film makers, the proposed extension of Section 181 is one of the extensions contained within the Bill.
It is unclear what portions of the Bill or if the whole Bill will be adopted, debated, amended, etc. We all must continue to have the patience we have had for the last several months while our government “springs” into action.
As always, stay tuned. I’ll try to post as soon as I hear one way or the other.
Thanks to my readers and an exhaustive search of government web sites, it appears that the time frame for passing the Tax Extender Act of 2009 has been…extended. The United States Senate Committee on Finance issued this statement on December 22, 2009: CLICK HERE.
Thanks in large part to the extensive health care reform debate, this important piece of legislation, which contains a one year extension of Section 181, will have to wait until 2010 for a Senate vote. The statement indicates that the Senate hopes to have a “seamless extension” for important tax benefits. So, while we cannot quite exhale yet, it is a bit of a relief to know that the Senate is still planning on picking up where the House of Representatives left off. It is not clear if there will be any gap in coverage for qualified films, but the indication from this statement is that there will not be any issues for films which have not or will not begin production in 2009.
As always, stay tuned…