Yesterday we finished the Cast Breakdown for the Casting Director. We’re very fortunate to have found a very talented person with lots of great connections to name actors. It looks like we’ll be able to attach 3 big names and 5 familiar faces to our show based on our new shoot dates of Aug. through Oct. in 2014.
There is only one hitch.
If you’re up on the latest in entertainment news, you’ve no doubt heard about the states that are dropping their tax incentives by the end of the year – Including the federal tax credit program. This will make a 30-33% difference for the investors.
Thankfully, one of our lawyers notified us about a legal loophole that will allow us to keep the incentives and tax breaks for our 2014 shoot. To meet this grandfather clause, we have to shoot one full day of principal photography in 2013. It can’t be second unit work, but actual production work.
The only scenes we can shoot this December will be our winter scenes, which take place on horseback in the snow-covered mountains. To facilitate this one-day shoot, so our investors can receive the 30-33% tax break, I’ll be flying to Spokane, Washington in November. This will give me an opportunity to talk with a family that owns a ranch, where my oldest daughter rode a horse last winter.
My youngest daughter and I also found a ranch in Colorado that might work as a back up site, but they normally close during the winter. The best part of location scouting for horse riding scenes is our ability to test ride the horses and see incredible scenery – One of the perks of filmmaking.
The bad news about shooting principal photography for one day this year is the additional costs incurred to pull the team together. Instead of spending $10-15M per hour as budgeted, we’ll be spending closer to $20-25M per hour. However, we’ll save the investors from paying taxes on $1.8MM or be able to sell those tax incentive credits to another company for $0.80 on the dollar – Making back in cash about 20% of our budget.
Regardless of how we take advantage of the benefits, it makes sense to spend $250M for a day in order to cash in on the Grandfather Clause and return $1.8MM to our bottom line. Oh, the cost of money.
One thing is certain, there will be a lot of production companies shooting for a day or more before this calendar year says goodbye to the tax credits. I’m thankful we have a team of experts looking out for us and giving us the latest concerning the entertainment and film incentive tax laws.