This vote was on an amendment by Tom Coburn, R-Okla., that would prohibit motion picture companies from benefiting from depreciation, a tax advantage they currently enjoy. Depreciation means gradual tax write-offs of business capital investments. The amendment was offered to a massive economic stimulus bill intended to spur job creation and economic growth.
Coburn said his amendment would eliminate a provision in the stimulus law that would give the movie industry a new tax break. He said striking the tax break would save the government $246 million.
“Let’s put the history out there. The movie industry today can take advantage and write off all of its production costs and take an additional $15 million out of the taxpayers’ pocket for every movie they produce in this country, of which 75 percent of the expenses are actually incurred in this country. What we have added is an earmark to markedly increase all movies produced in 2009, which is an additional $246 million,” Coburn said. “We already created tax breaks, starting in 2004, for the movie industry that are greater than we have for any other industry, and now we are going to add to it—at a time when Hollywood is at one of its zeniths of success.”
Max Baucus, D-Mont., said last year movie companies were mistakenly removed from the list of companies that could take advantage of bonus depreciation, at the behest of “a certain House Member who personally decided he had an issue with the film industry, so he took it out for no good reason.” Baucus did not name the person.
“This is not putting a new industry back in the bill that would be entitled to bonus depreciation. It corrects a mistake where the film industry was incorrectly taken out in the last bonus depreciation bill and was taken out for no good reason—taken out for a very personal reason, if I may be totally candid. It seems to me we should get back to a level playing field and treat all industries the same, not bring a vendetta against one industry, as was the case a year ago, but, rather, put this back in because it is only fair. That is an American industry too, and this bonus depreciation would apply only to films produced in the United States,” Baucus said.
By a vote of 52-45, the amendment was adopted. All but two Republicans present voted for the amendment. Of Democrats present, 13 voted for the amendment and 42 voted against it (including the most progressive members). The end result is that the measure went forward with language that would keep out of of the tax code a provision that allows movie production companies to write off certain production costs.