Originally Posted by DenverBrit
Movies are made out of the country to avoid taxes? How??
Runaway production has been an ongoing problem for Hollywood labor unions and guilds. The lure of lower budgets with nonunion workers has attracted producers to right-to-work states, such as Florida, as well as other states that have recognized film and television production as a boost to local economies. Meanwhile, foreign locations, such as Eastern Europe and parts of the Third World, offer low budgets and exotic locations. Most recently, Canada has lured film and television production away from Hollywood with offers of trained workers, tax breaks, and a favorable exchange rate.
Pressure from the availability of a nonunion option and runaway production has forced the unions to make concessions during contract negotiations, as well as to push for government remedies.
The Canadian Federal Government provides foreign producers with a subsidy called the Film Production Services Tax Credit, which now equals 16 percent of the Canadian labor costs. (It was recently raised from 11 percent to offset a rise in the Canadian loonie against the American greenback.) Also, British Columbia offers an additional 18 percent rebate on labor from that province. Finally, there is a 20 percent break on digital effects, if they are done in Canada.