Magazine article Variety

Tax Credits Conquer Trouble in Paradise

Magazine article Variety

Tax Credits Conquer Trouble in Paradise

Article excerpt

some would say Puerto Rico is an economic basket case. The territory is weighed down by a debt of more than $70 billion, and it's reeling from a decade-long recession. Unemployment remains sky-high.

More recently, publicity over the mosquito-bome Zika virus has cast another shadow over the tropical island.

Yet despite all obstacles, Puerto Rico's generous film incentives are as robust and popular as ever. The Caribbean territory offers producers a 40% tax credit on local expenditures and a 20% tax credit on payments to non-resident talent, including producers, writers, actors and even stunt doubles.

A relatively recent perk: an additional 10% credit for projects with stories based in Puerto Rico that use the island backdrop. Adam Sandler's upcoming Netflix comedy "The Do-Over" is the first to tap it.

"Puerto Rico has been in an economic recession for over 10 years now, and the reality is that film incentives have prevailed over every new administration because of their unquestionable impact on the overall economy, creating hundreds of jobs, and promoting related industries such as hospitality and food service," says Nadia Barbarossa, film division director of Tax Credits Inti., headquartered in Puerto Rico.

Moreover, in May 2015, Gov. Alejandro Garcia Padilla signed a new amendment to the Puerto Rico Film Industry Economic Incentives Act, providing up to a whopping 90% tax credit for projects that meet certain qualifications."! can only think this is proof that, moving forward, the government will continue to support the film incentives for many decades to come," Barbarossa notes.

The island country saw an uptick in audiovisual production when its film law expanded the existing 40% tax credit in 2011 to encompass commercials, music videos, live performances and nonfiction TV programs in addition to film and TV projects. The number of shoots on the island jumped from nine in 2010 to 17 in 2011.

Overall budgets of the projects in 2012 were three times higher than those of the previous year. In 2015, about $100 million was spent on production in Puerto Rico.

"This fiscal year, we have already raised $86 million," says Puerto Rico film commissioner Demetrio Fernandez, who has -> «- observed a surge in TV series production as well as commercials. …

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