The Multimedia Jobs Act (MJA) is new legislation that builds creative and tech-related industries to attract new jobs and talent to Michigan.
The two-bill package was introduced in the House by Representatives John Roth (R-Interlochen) and Jason Hoskins (D-Southfield) as HBs 4907-4908. Senators Dayna Polehanki (D-Livonia) and Jeremy Moss (D-Southfield) introduced SBs 438-439 in the state Senate.
Check out our overview video below to get up to speed quickly.
FAST FACTS
Currently, 41 states and cities, as well as, over 100 programs globally have film and multimedia incentives. In this industry, Michigan is not on an even playing field and can’t even compete with its neighboring states.
This bi-partisan legislation was rebuilt from the ground up to accomplish attainable goals. The program creates jobs while prioritizing in-state labor and businesses, promotes diversity, minimizes Michigan’s “brain drain,” and boosts tourism. It will also have a positive economic effect on many other industries, not just the film industry. Unlike many other states, our legislation also includes commercials, corporate videos and commercial photography.
It is a transferable tax credit, so the credit stays in the state to benefit Michigan companies. Money is never issued by the State. Economic benefit from immediate spending takes place well before the credit is issued. The bill promotes steady and sustainable growth and the 10-year sunset establishes confidence in the program and allows ample time to build infrastructure and a solid crew base.
The bill is financially accountable. It begins with an initial credit cap of $125M for each of the first three years and includes modest increases in subsequent years. And a built-in redemption fee assessed on each project will help fund the Film and Digital Media Office.
We are anticipating $300M - $500M of direct spend in the first year. If the qualified production decides to keep the post production in Michigan, those qualified expenditures will count towards the credit as well. These are high-paying creative and tech jobs.
The Michigan Multimedia Jobs Act is a fiscally responsible program that addresses our state’s pressing economic need for growth. The bill is PRO JOBS, PRO ECONOMY and PRO MICHIGAN and has the potential to, once again, elevate our state as a leader in Multimedia Production.
A FEW DETAILS
Here is how our bill, with the inclusion of a commercial/corporate industrial component, will elevate Michigan as the industry leader and help boost Michigan businesses and labor:
- Only verified, qualified expenditures that have been spent qualify for the Michigan Multimedia Jobs Act. This allows Michigan to receive both the economic impact as well as collect the taxes on those expenditures before a tax credit is issued.
- Money is never issued by the state.
- Only a State of Michigan Tax Liability may be offset. This is a transferable tax credit not a rebate.
- For projects less than 20 minutes or commercial photography, $50K minimum in qualified expenditures
- For projects 20 minutes or more, $300K minimum in qualified expenditures in Michigan (live action or animation).
- Post-production done in the state will count if the above minimum spend requirement is met.
- 30% incentive credit for qualified Michigan residents.
- 25% incentive credit for qualified Michigan-based vendors.
- 20% credit for qualified non-resident personnel expenditures.
- An extra 5% credit for qualified personnel expenditures on minority persons, women or disabled personnel or on hired Certified Business for Minorities, Women or Persons with Disabilities Owned Qualified Michigan Vendors.
- Additional 5% credit for Advertising Commercials, Corporate Videos and Commercial Photography that use an approved Film Office Alternative Marketing Opportunity.
- $500K salary cap for person per project.
- Above the line (producer, director, writers, etc.), below the line (crew, post-production) and talent qualify.
- An Applicant must produce Qualified Productions, own the copyright to the production during the production period, or is authorized by the copyright holder or person(s) who owns the copyright for the production’s duration.
- Film & TV have their own allocated bucket of tax incentives.
- Commercials, industrials, and commercial photography have their own allocated bucket of tax incentives.
- Multi-market distribution is NOT a requirement.
- Allows 3rd parties to apply on behalf of the copyright holder.
- Independent Michigan CPA verification required.
- 48 hours prior to 1st shoot day applications must be submitted for projects under 20 minutes or commercial photography, and 7 days for projects 20 minutes or longer.
- Transferable once to up to 10 assignees within one year from the credit being issued (allows credit to be sold via a broker, typically at a discount of 80-90 cents on the dollar).
- There is a $2,000 non-refundable application fee for films/TV projects 20 minutes or more and a $1,000 non-refundable application fee for commercials, corporate videos, and commercial photography.
- Project cap is 20% of the annual cap at the time of application
- A redemption fee equal to 1% of the credit claimed to help fund the Michigan Film & Digital Media Office
Practical Considerations
Marketers can use tax credits against their own State of Michigan tax liabilities or they can be sold to an assignee that has a State of Michigan tax liability. If they don’t have a State of Michigan tax liability, they can sell it via a broker for typically 80-90 cents on the dollar to an assignee with State of Michigan tax liability.
This helps both Michigan companies and the applicant/copyright holder that produce in Michigan. The Michigan Multimedia Jobs Act as currently proposed in our bill has an allocated bucket of money for film/TV and a separate bucket for commercials, corporate videos and commercial photography. All unused allocations rollover each year there is a surplus to the next year.
The commercial, corporate video, and commercial photography cap grows from $25M for each of the first 3 years of the program, then $50M for the next 3 years and $75M in the remaining 4 years of the program.
The film/TV cap grows from $100M for each of the first 3 years of the program, then $150M for the next 3 years and $200M in the remaining 4 years.
Praise for This Legislation
The reaction to our bill is being positively received in the state Legislature by Democrats and Republicans.
Legislators are beginning to understand the urgent need for creative solutions to our economic predicament and see the opportunity with the Michigan Multimedia Jobs Act. Other states have already taken steps to re-instate film incentives or even increase their offerings. Demand for content is high and growing with marketers, TV, film and streaming services looking for content.
Michigan has a budget surplus of over $9 billion. A multimedia jobs act is very timely as it will certainly boost jobs, retain and attract talent, and stimulate economic activity.
Please Note: Any items listed above are subject to change as the bills work their way through the legislature.
Michigan Film Industry Association (MiFIA) Lansing, MI 48933 (517) 580 - 7710 mifia@mifia.org |
