Runaway Production

Posted: Thu., Feb. 16, 2006, 9:00pm PT

City gives push for tax break

L.A. offers incentives to stay local

About 1,200 industryites have received exemptions from the city of Los Angeles from paying business taxes on their showbiz earnings.

The response stems from efforts over the past two months by the city and Hollywood guilds to publicize the exemption -- available to independent screenwriters, directors, actors and recording artists -- and the upcoming Feb. 28 filing deadline.

"We're very pleased at the response we've gotten so far this year," said Antoinette Christovale, the city's director of finance.

The exemption, part of a variety of changes in the city's business taxes, went into effect last month and covers creative workers in the entertainment industry who earn less than $300,000. The change was made as part of the city's efforts to slow down runaway production.

Christovale said nearly a third of the callers to the city about biz tax changes have been seeking info about the creative exemption. She promised that all voicemail calls will be returned within 48 hours.

One key component of the exemption for artists requires they not owe from prior years. The city's exemption for artists applies only to renewing business taxpayers.

The WGA West has set up a hotline at (323) 782-4560; the city's posted an FAQ document www.lacity.org/finance/finA5a.htm.

The issue of revamping the code came to prominence in late 2002 after hundreds of film and TV writers received a letter from the city advising them of possible business taxes owed back to 1999 for conducting business without a city tax registration certificate.

In a move spearheaded by members Wendy Greuel and Eric Garcetti, the Los Angeles City Council eventually decided on a wider revamp of the business tax, which includes tax breaks for small businesses, including production companies, exempting firms that have less than $100,000 in annual revenues and lowering rates on all others.

Contact Dave McNary at dave.mcnary@variety.com

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