>> Variety / Top News
Berman, Dreier unveil tax deduction
Provision allows producers to expense first $15 million
By: Ted Johnson
Posted On: May. 17, 2012
Reps. Howard Berman (D-Calif.) and David Dreier (R-Calif.) say they have introduced legislation to extend a tax provision designed to prevent production from migrating overseas.
The provision, called Section 181, allows producers to expense the first $15 million of production costs if 75% occurs in the U.S. The provision is actually modest when compared to incentives offered by other countries, and it is not a tax credit but a deduction.
The legislation extends Section 181 another two years starting retroactively on Dec. 31, 2011. The provision was originally part of a jobs bill passed in 2004.
Berman said in a statement, "We must make every effort to keep American productions here in the United States."
Its introduction comes as Berman faces a tough re-election fight in a newly drawn San Fernando Valley congressional seat. He is facing another incumbent Democrat, Brad Sherman, in the June 5 primary, and both have been anxious to highlight legislation beneficial to workers in the district. Sherman said that he plans to introduce a bill this summer making Section 181 permanent.
"A permanent credit will have far greater impact since projects need to be planned and financed in an atmosphere of stable and known tax laws," he said in a statement. "Almost all this year's changes to the Internal Revenue Code will be adopted in late fall."