(February 9, 2007)—The following is a statement from Screen Actors Guild (SAG), the Directors Guild of America (DGA) and the International Alliance of Theatrical Stage Employees (IATSE) in response to today’s ruling by the Department of the Treasury (Internal Revenue Service) that participations and residual payments must be considered “production costs” for the purpose of calculating the $15 million production limit stipulated in the federal production incentive (Section 181) contained in the American JOBS Creation Act of 2004.
“Keeping film and television production and the thousands of jobs it generates in the United States has long been one of our top priorities. We are extremely disappointed with today’s ruling, which we believe undermines the intent of the production incentive contained in the JOBS Act legislation. While the incentive may still prove workable for television production and for some independent films, the ruling that participation and residuals--which are often based on sales and profits that cannot be known at the time of production--must be included as original production costs undermines the use of the incentive for many independent, low budget films. It was exactly those productions that the legislation was intended to help. We do not believe that this is the outcome Congress intended.”