Film Short: Section 181 News Update

Published On November 24, 2009 | By admin | film, film finance, Film Short, filmmaking

I received an email from Entertainment Attorney, Corky Kessler regarding the status of Section 181, the Federal Tax Incentive that’s part of the Jobs Creation Act.   Passed in 2004, Section 181 was set up to curb the number of runaway productions shooting films outside of the U.S.  If the newly drafted legislation, which is called The Extender Act of 2009, doesn’t become law then Section 181 is scheduled to sunset on December 31, 2009.  The new Act is set to be presented to the House after Thanksgiving and would extend Section 181 for an additional year.  There is no guarantee that this will happen, however, especially since there is a lot to do in a short amount of time.  The Act must be debated and approved without amendments before the end of the year in order to be passed.

Due to the uncertainty of the situation, filmmakers are advised to explore the option of “grandfathering” their movie and television productions before the end of the year.   In order to be “grandfathered”, several conditions must be met including forming a Limited Liability Corporation (LLC) in a designated state, having a finished script, preparing a budget and documentation required for investors and completing 1 day of principal photography with a speaking part, which must be seen in the original cut, but doesn’t have to be in the finished product.  There may be other conditions to consider, so it’s advisable to consult an attorney like Corky to be certain projects are properly protected.  He can be reached via email at for more information.

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2 Responses to Film Short: Section 181 News Update

  1. Steve Wilburn says:


    So, have you heard anything new on the renewal of Section 181?


    Steve Wilburn

  2. admin says:

    Hi Steve:

    I have heard that it is in the Senate Ways and Means Committee and must be passed before 12/31 in order to continue on. It is part of an Extender Bill and while many are unsure as to whether or not it will be renewed before it sunsets, there seems to be optimism that it will reappear at some point next year if it does expire. What changes or upheavals this would cause is completely unknown, however. Meanwhile, being “grandfathered” seems to be the safest bet for filmmakers.

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