DES MOINES, Iowa - State officials have resumed issuing tax credits to qualifying film projects, announcing Friday that two movies have been awarded financial incentives from the Iowa Department of Economic Development utilizing the fully revised process of issuing tax credits.
Projects receiving tax credits under the Iowa film, television and video promotion program, were "Sam Steele & the Junior Detective Agency" and the film, "Ash."
"We are very pleased to be able to assist these companies with their Iowa projects," said DED Director Bret Mills. "IDED, the Department of Revenue, the Auditor of State's Office, and the Office of the Attorney General have designed and implemented a comprehensive process to ensure all parties involved have a clear understanding of the program and also that a full audit of the project is completed prior to the issuance of the tax credits."
The films are part of a pool of projects that received initial DED approval for tax credit awards before the program was suspended in September 2009 by Gov. Chet Culver after an internal review found incomplete and inaccurate recordkeeping, altered contractual terms, questionable expenditures, use of pass-through entities and broker fees in the management of a program.
Culver later partially lift the suspension of state tax credits for projects that had contracts with the state or had registered under the program. The program isn't taking new applications, but those that had been approved before Sept. 18, 2009, are being allowed to negotiate contracts with the Iowa Film Office. The Legislature suspended any new applications until July 1, 2013.
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Iowa's tax credit program provides a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa. But the Iowa Attorney General's Office has clarified the program to indicate that producers could qualify for a maximum 25 percent credit for qualified expenditures made in Iowa.
Culver halted the state's film tax credit program last September following revelations that some of the credits were used in the purchase of luxury vehicles and other potential abuses. Five people lost their jobs due to problems associated with the administration of the film tax credits, including the resignations of the state's two top economic development officials and the dismissal of the director of the state's film office.
Criminal charges since have been filed against the office's former director, as well as production company officials for allegedly inflating expenses.
A summary issued at last week's Economic Development Board meeting said 158 projects were in the tax-credit program, with 59 revoked. Twenty-four have been given tax-credit certificates; 30 have had an application approved but don't have a contract; and 45 have a contract. The summary said applicants for the 45 projects anticipate spending $246 million in the state.