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Friends – I hope you all had a happy holidays! We are
gearing up for the new year here in our office, which includes implementing the
changes in Michigan’s film and digital media incentive program under Public Act
396 of 2014 which was enacted on December 26, 2014.
These new statutory guidelines will be in effect for all
applications from this point forward, as well as any application currently
pending with our office.
The most significant changes from the previous incentive
program are below, but you can see a more complete breakdown here.
Our team is working to update our materials and website accordingly, but please
don’t hesitate to reach out if you have specific questions.
The new law stipulates that projects will be required to
hire Michigan residents in order to be eligible, laying out required hiring ratios on
the following schedule:
- 1 Michigan resident for every non-resident hired
– January 1, 2015-September 30, 2017
- 1.5 Michigan residents for every non-resident
hired – October 1, 2017-Sept. 30, 2020
- 2 Michigan residents for every non-resident
hired – October 1, 2020-Sept. 30, 2022
- 3 Michigan residents for every non-resident
hired – after October 1, 2022
The law also requires that all deferred, residual or
contingent compensation and royalties be subject to taxation in Michigan and
applicable taxes be withheld and paid to the state for a period of not less
than 12 years following the theatrical release of the qualified production or that all ATL loan outs must be registered to do business in the state.
Finally, I want to reiterate that this new legislation
updates how our program is administered, but does not impact the current
funding process in any way. Our incentive budget will continue to be determined
annually as part of the overall budget process. For the current fiscal year, we
are operating with an incentive budget of $50 million.
We will have lots of opportunities to talk with the industry
about the changes to our program in the coming months, starting with Sundance
Film Festival, where we will once again be hosting an event on January 24. We
will also be attending the Locations Trade Show in Los Angeles March 5-7 and
the Game Developers Conference in San Francisco March 2-6. Additionaly we plan to attend SXSW in Austin at the end of March. So please let us know if you will be attending any of these events.
And as always, our staff is here to answer any questions you
may have in the meantime. We are looking forward to a prosperous new year in
2015.
Best,
Margaret O’Riley
Director, Michigan Film Office
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