Tax incentives take credit for TV spot
increase to 46% of total film dollars

Once all the counting and accounting was done and preliminary estimates made by the Illinois Film Office, 2006 shaped up as an astonishing year for Illinois production.

What was mind-blowing was the fact that out of the estimated $65 million from production in Illinois, nearly half of the total?$30 million?came from commercial production!

The stunning escalation of spot business can be directly attributed to big advertisers, like Sears, Quaker Oats, McDonald’s, taking advantage of the film industry’s hard won 20% tax credit on labor and suppliers.

Advertisers’ tax applications had more than doubled to 89 last year, up from 40 in 2005, with most of the applications flooding in after the tax credit extension took effect last May.

Since then, word of the incentives has spread like butter throughout the adworld, and applications from out-of-town production companies have increased sixfold in just 12 months.

Sears unquestionably was the state’s biggest spot producer of 2006, according to tax credit tallies. The retailer had informed its agencies, Y&R and A. Eicoff, about the tax credit (instead of the other way around) and the $2 million worth of production it spent in the state enabled Sears to claim a $400,000 tax credit.

Sears’ agencies, and the production companies they hired, HSI and MJZ of L.A. and Harpoon Pictures of New York, spent most of the fourth quarter of 2006 shooting in Chicago. Its Christmas package was so extensive that crews dubbed it “Sears: The Movie.”

Sears wasn’t alone, however, in picking up Illinois’ generous tax credits. Story clients’ Quaker Oats, Wal-Mart, Hartford Insurance and Ore-Ida took advantage, as did local production companies Ebel Productions, Digital Kitchen, Radar, One World and Vitamin for their clients.

Some speculate the $30 million number for commercials could be half again as much, since many companies that filmed here last year did not apply for the tax credit.

Still, not every major advertiser took advantage of the tax incentive. Northbrook-based Allstate had not been made aware of the tax credit when it filmed the most expensive spot ever in Chicago last summer, centering around a car driving off Marina City, thus losing what might have been a substantial tax credit.

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