The Illinois Production Alliance (IPA) has been a major force behind the Illinois Production Services Tax Credit Act, the main catalyst for the rebound in state production revenue, from $25.6 million in 2003 to an estimated $90 million in 2005.
Now it’s pushing for an even more aggressive tax credit, in light of intensifying competition from other states.
Massachusetts’ 22% across-the-board credit, for instance, recently beat out Illinois’ 25% wages-only credit to draw Disney’s production of “Daddy’s Girl.”
ReelChicago talked with Eileen Willenborg, IPA President and executive director of AFTRA/SAG Chicago, about the tax incentive, prospects for Illinois production, and efforts to foster homegrown film business.
ReelChicago: To what extent do you credit the Tax Credit Act for the rebound in Illinois production in the last couple years?
Willenborg: The tax credit signaled that Illinois is willing to compete for this segment of the industry. Without the interest generated by the tax credit and the reduction in production costs that the credit has provided, it is extremely unlikely that the business would have rebounded to the extent it did in 2004 and 2005.
ReelChicago: But now other states have become more competitive.
Willenborg: Yes, other states continue to offer better incentives than Illinois and new, more aggressive incentives are added elsewhere regularly. The result is that we are once again at a competitive disadvantage. To regain a competitive position, Illinois needs to offer a tax incentive that matches those of other states.
ReelChicago: What current changes to the Act, if any, have been most instrumental?
Willenborg: A major improvement in 2005 was the addition of “transferability,” meaning that credits can be traded between buyers who have a need for them. This has made the credit much more useful to smaller independent projects and the commercial industry.
ReelChicago: What further changes is the IPA advocating and why?
Willenborg: The IPA has recommended three basic forms of improvements.
These include: extending the current wage-based incentive to non-wage expenditures, to boost the over-all credit value to improve our ability to compete; enacting a credit for investors who finance films made in Illinois, to provide greater access to capital especially for local independent projects; and enacting a credit for capital spent in Illinois on equipment and machinery used specifically for visual media production, so as to facilitate the growth of our local production infrastructure and the entry of more minority-owned support companies into our market.
