VFX tax breaks and incentives

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VFX tax breaks and incentives

So lets start with something very exciting and dare I say… sexy. That’s right! We’re going to talk about tax breaks. Keep your shirts on! This is a classy blog.

Right. That’s better. Let’s begin. The humble tax break has been a friend of the Studio and a close confidant to the Producer for many years. It’s a way to keep costs down, and boy do they need to keep costs down. Movies have never been so expensive, or had so much at stake. That’s why tax incentives are so damn tasty.

For those doing the tasting at least…
Say Québec decided to put out a pretty decent tax incentive. Oh you know something like,
– 25 % cash-back on all expenses
– 20 % bonus on all CGI and Green screen shots applicable on extended eligible labor.
– No minimum spend, no caps

Well if I was a studio or Producer I’d think that was pretty darn interesting. Tell me more Québec….

But do the VFX houses get any of that tax breaky goodness?

Well no, not really. It basically means Studios get cash back. Which in the scheme of things means they pay less for what they get out of the VFX house.

And if you’re some sort of of multiheaded VFX co-ordinating supercomputer reading this, and are currently in the position of bidding for a big budget VFX show… well it would really be rather clever of you to move over to Montreal, open up a facility and move some of your VFX team there before the other ones do… because then everyone will hire you, because if they hire you they get Canadian cash back. And this is why the VFX community is doomed to roam the wastes of corporately mandated geographical locationing, like a nerdy version of the Amazing Race.

But this is the way of the world you say! That’s why the communists lost! Long live the free market! Yeah well, you’re right. The rest of the world knows this. But then why are all the Californian VFXers complaining..?

Well they want a tax break/cash back too! And Eric Roth the Executive Director of the VES, (supposedly the global organisation for visual effects) is all about the Californians. Probably because he is one. But I quote, “We certainly recognize that we live in a global economy and in fact, VES has members in 30 countries around the world. Many of those countries – and many states elsewhere in the US – offer aggressive tax incentives – which seek to lure visual effects work to their communities and away from our state.”

Way to speak for everyone there Mr Executive Director.

So lets play a game shall we… Say Californian VFX artists get this tax incentive/relief/break and the Studios get Californian based VFX houses to do their shows. Well that can’t be your endgame, surely? Because those tax breaks/cash backs/incentives are still going back to the Studios! What would happen is that the Californian VFX artists would get to stay in California, and everyone else would have to come too! Never mind their families in London or Vancouver or Wellington. Same problem, different day.

And it’s a problem that won’t go away by petitioning or complaining. I doubt it would even go away by crowdsourcing a legal challenge against these tax incentives. Kudos for trying though.

There needs to be a more forward thinking approach. Lets not grasp at quick fixes. What the industry needs is wholesale change. It needs to climb above the line in the budget. It needs to become a gross participant, it needs to shed the shackles of indentured servitude, and it needs to realise its a global game. The stakes are high, and if your left hand is fighting with your right hand over who gets to hold the cards, then nobody is watching the Studios and Producers cheat the system. And yes, that is a very strange metaphor involving possessed hands. But I’m going to stick with it. All the VFX houses should be holding hands on this. Because they ultimately hold the power, in those hands… There are very few places that can make a Hollywood tentpole picture. They could Writers Strike this thing! I say that because a VFX facility (although filled to the gills with talented ninja magicians) is in the eyes of the world at large, the equivalent of a Writer or a DOP, even though they are legion.

I’m sorry to say it but the folks at the top of the VFX corporate bundle, the ones who’ve been making the bad deals, undercutting each other at every turn, and migrating their respective workforces, are ultimately the ones that need to solve this problem. The artists can strike and moan and scratch and unionise as much as they like, but none of the balls are in their court.

So petition your bosses to petition their bosses to hold hands, and then climb above the line in the budget… Together. Or you know, race to the bottom in a last man standing, free-for-all,
knock-down-drag-out-battle-over-ever-decreasing-returns to the death. Probably taking place this summer in Montreal, Quebec.