The following is the unedited copy of “Five Questions With: Doryanne Hamel” that was used in the PBN article published on Monday, September 27, 2021, written by Nancy Lavin. The link to the edited PBN article can be found [here].
Q: What is your/your firm’s role in the accounting side of the Motion Picture Tax Credit Program? How exactly does the audit process work on your end?
A: Our role is to issue a report indicating we have examined the state certified production costs and based on our procedures we believe they comply with the requirements of the rules and regulations. We do this by obtaining a client prepared detail summary of eligible production costs and examine the information to ensure compliance to the requirements.
Q: How has the auditing process and/or state requirements for eligible expenses evolved over the years?
A: Our procedures have evolved in accordance with the attestation standards that are followed by the certified public accounting industry and revisions to the rules and regulations for the certification of the Motion Picture Production Tax Credits. There has been clarification or additional guidance issued regarding the definition of “State-certified production cost”.
What does that mean for your firm?
For our firm, this means staying on top of these changes and communicating them clearly to the clients that engage us, in order to provide the best possible service to them. The quality of our work is critical to maintaining the firm’s reputation for providing these services amongst our clients and potential future clients, peers, state agencies and film & motion picture production industry.
Q: Do most of the production companies you work with seem aware of the requirements of the program in terms of documentation before hiring you?
A: Most of the production companies that have engaged us were somewhat familiar with the program requirements.
Q: How much of your work involves educating them about proper documentation and credit eligibility?
A: We provide guidance during the engagement process as needed to ensure proper documentation is maintained and available to the state for the approval of the tax credits.
Q: Have you ever had a company submit costs that are not eligible for the tax credit? If so, when and what were the circumstances?
A: We have not received any communication from the state on any significant costs that were not considered to be eligible for the tax credit. We are pleased to state that all tax credits have been approved by the state and received by our clients, for whom we have provided services in relation to the Motion Picture Tax Credit Program
Q: The program has been criticized by some lawmakers and even the state Office of Revenue Analysis for not creating the economic benefits that it was intended to. Do you have any thoughts on this? Is there more the state could or should do to ensure the money spent on RI film productions benefits the local economy?
A: What I have observed assisting productions with the Motion Picture Production Tax Credit Program is certain industries (i.e. hospitality, food/beverage, transportation, retail stores, local crew jobs, rental real estate entities, contractors) appear to have benefited from bringing this industry into the state. Film productions highlight the beauty of our state, which shows other businesses and industries what Rhode Island has to offer.
The state could seek ways, such as additional tax credits, to support local film production companies that create permanent jobs (not temporary ones), and support local start-up companies that focus on the needs of this industry. In the post pandemic era, this industry could contribute to a quicker recovery to businesses that were hurt significantly during the pandemic.
By continuing to strategize, support and develop this industry, that touches so many different types of businesses, there could be long run economic benefits to the state.
For more information about the Motion Picture Tax Credit Program, please contact Doryanne Hamel at 401-831-0200.