82.1 F
San Fernando
Thursday, Mar 28, 2024

BTAC Takes Look At Entertainment Industry Effects

BTAC Takes Look At Entertainment Industry Effects By JACQUELINE FOX Staff Reporter Representatives from the Business Tax Advisory Committee (BTAC), which is overseeing efforts to overhaul the city’s gross receipts tax, were scheduled to begin the first “tweaking” session Feb. 13 of a comprehensive and complicated draft report of recommendations for changes, released in January. BTAC’s top agenda item called for approval of a motion to make several changes to the way the city currently taxes entertainment firms, namely small production houses, as well as entertainment sub-contractors. The sector was not broken out by the company which compiled the draft report, Fresno-based MBIA MuniServices Co. As such, there have been several questions raised about how proposed recommendations by MBIA for a tax on square footage, coupled with a tax based on revenues that would vary for different business sectors would work for entertainment firms, particularly because of the industry’s vast number of business categories, such as pre- and post-production houses, caterers, set designers and prop houses, for example. BTAC was also expected to vote on a motion to modify the MBIA draft report to recommend that the city’s business tax be reduced for entertainment sub-contractors or eliminated all together, as well as other changes. In addition, BTAC will likely recommend going forward that the city’s existing revenue caps for production companies be increased to approximately $20 million and that the tax table under that cap be expanded to provide relief for small- and medium-sized production companies. Finally, BTAC will also likely be pushing for a change in the definition of production activities for companies subject to the caps to include new companies specializing in newer technologies, including digital entertainment services and products, and will also consider a new structure for taxing companies which earn revenues through product licensing agreements and other intellectual property avenues. According to Marvin Selter, BTAC co-chairman, the recommended changes to the report for the entertainment sector could provide a framework for other sectors to follow as the process of evaluating the draft report moves forward, which will include a series of several public outreach meetings across the Valley and citywide. Dates for those meetings have yet to be determined but should be scheduled later this week. At BTAC’s meeting Feb. 2 there were several questions raised about a particularly troubling proposal for commercial property owners. Within the discussion it was determined that a square-footage tax would apply to all commercial buildings, even those that are vacant, provided the building is either listed for sale or intended to be put on the market some time down the line. Finally, BTAC has approved a motion calling for an additional $90,000, which will be used to cover additional consulting services by MBIA staff. BTAC anticipates it will make its final recommendations to the city’s ad hoc committee on business tax reform by April 29. Submit Your Questions The Business Journal is seeking feedback from readers concerning proposed changes in the city’s business tax system. In upcoming editions, Marvin Selter, Valley businessman and Business Tax Advisory committee member, will answer questions readers may have about efforts to change the system and how they may affect certain industries. Please submit them to Business Journal Editor Jason Schaff by e-mail at [email protected] or fax to (818) 676-1747.

Featured Articles

Related Articles