Hawaii has some very impressive and generous tax incentives

June 16, 2004

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HAWAII EXTENDS ACT 221

Hawaii has some very impressive and generous tax incentives. Considering all the public criticism of the Act, it was somewhat of a surprise to see state lawmakers pass a bill to extend the program through 2010. While the legislation has not yet been signed by Governor Linda Lingle, her signature is expected soon. The provision that the law be “liberally” construed was deleted, and the granting of credits was limited in some ways. Investors will no longer be allowed to recoup large multiples of their investments in the form of state tax credits. As of July 1, 2004, “multiples” of 2.0 and above will be required to submit evidence substantiating economic substance and business purpose of the transaction. Deals where an investor receives up to one-and-a-half times the amount of the initial investment in the form of tax credits over the life of the credit would be presumed acceptable. The Department of Taxation will have the right to investigate deals where an investor receives between 1.5 and two times the amount of the initial investment in tax credits. This means a Hawaiian investor that invests $100,000 in a film can be assured to receive a return of $150,000 in tax credits over five years. What will need to shown to earn a higher multiple is not entirely clear until the Department of Tax issue guidelines regarding the manner in which economic substance and business purpose may be substantiated. More info is available at www.nasvf.org/web/allpress.nsf/pages/7171Any source

“TO END ALL WARS” TO BE RELEASED ON DVD

June 8, 2004

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MARK TO TEACH “SELF-DEFENSE” AT UCLA JUNE 12-13

This weekend, Mark will be at UCLA teaching “Self-Defense for Independent Filmmakers: Protecting Your Legal Rights” In this intensive weekend seminar, filmmakers learn how to anticipate problems before they arise in their negotiations with production and distribution companies and create incentives to encourage the companies to live up to their agreements, including performance incentives, default penalties, and arbitration clauses. In the event of an unresolvable dispute, participants learn what remedies are available to enforce their rights. To enroll in the course online, go to www.uclaextension.com and enter Course Reg # Q3515U.

“TO END ALL WARS” TO BE RELEASED ON DVD

Congratulations to our clients David Cunningham and Jack Hafer. The DVD edition of their film, “To End All Wars,” starring Robert Carlyle, Kiefer Sutherland, and Ciarán McMenamin, hits the streets June 15. It’s distributed by Fox Home Entertainment and is available for pre-order on Amazon.com.

MARK’S NEW COLUMN ON ENTERTAINMENT LAW

Mark has begun writing a monthly column on entertainment legal issues. The first article for the column was “Protecting Your Stories: Borrowed Elements or Stolen Ideas?”; the second was “How Distributors Evaluate Films.” Several filmmaker organizations will be carrying Mark’s column in their publications and newsletters. These groups and publications include the Film Arts Foundation’s “Release Print,” “Focus In,” “Hawaii Film & Video” magazine, Imagine, NALIP, New York Volunteer Lawyers for the Arts, and Washington Lawyers for the Arts.Any source