Investments in Broadway shows and other live entertainment will soon get the same tax break that has long been on the books for TV and movie productions -- a move that will make it easier to attract financing, producers say.
The legislation sponsored by Sen. Chuck Schumer (D-N.Y.) and passed by Congress last week will make the investments eligible or tax deductions the same year they are made.
The change, which takes full effect next year, will be up for renewal every two years -- like its film industry counterparts.
“Nobody works harder than the people on Broadway and nobody deserves this bill better than the people on Broadway to stimulate theater,” Broadway producer Harvey Weinstein said, speaking at Sardi’s surrounded by several Broadway stars, including Matthew Morrison of “Finding Neverland.”
Schumer said he hopes the legislation, part of the Protecting Americans from Tax Hikes Act of 2015, makes investing in new shows a bit less of a risk. It will allow those who put their money up for a show the ability to take is a deduction immediately, regardless of if a show is turning a profit yet.
“In a sense, this is our insurance policy in a bad year,” Schumer said. “So it makes a great deal of sense.”
Robert Wankel, the chairman of The Broadway League, said convincing investors to hand over their money is difficult enough, and the old tax code put the industry at an even greater disadvantage by having to tell investors they may have to pay taxes on that investment before turning a profit.
“Our investors who may have been fortunate enough to produce a profitable show face tax liabilities before they even earn their money back,” Wankel said. “We believe this code change will make a dramatic impact on our ability to attract financing for new productions, and encourage existing producers to reinvest their profits in new shows.”