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Special effects, Iowa film credit style.

October 07, 2009

Some filmmakers set up strawman Iowa entities to qualify purchases from non-Iowa vendors for the 50% transferable film tax credit subsidy, according the film credit accountant report issued this week.

WHO reports that not all of these middlemen were set up by the filmmakers. One was an existing company owned by the head of the Iowa Motion Picture Association, the biggest booster of the film credits.

Some legitimate, pre-existing Iowa companies also served as "pass through" entities. One of them - Full Spectrum - is owned by Kent Newman. He is also the Executive Director of the Iowa Motion Picture Association.
"Let's be very clear. The original bill says that labor, goods and services can be out-sourced through an Iowa vendor," says Newman.

Newman says Full Spectrum served as the "pass through" on two films, " South Dakota" and "Sam Steele's Junior Detective Agency." He estimates up to 50% of the expenditures on each film were the result of out of state purchases. However, he says that's because many specialty items were not available in Iowa.

Film credit boosters say that the credits are wonderful because they come back to Iowa businesses. Yet they also say its ok to give credits for stuff from outside of Iowa because you can't buy all the stuff you need to make a movie in Iowa. If you're the middleman for the deal, maybe that makes sense, but not if you are one of the chump Iowa taxpayers funding the sweet deal.

Tags: Corporate welfare.Economic development.Film accountant report.film credits.Film criminal investigation.harold hill.