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The Honolulu Advertiser
Posted on: Saturday, October 12, 2002

Official urges revising incentives

By Beverly Creamer
Advertiser Education Writer

A Hawaiian word would no longer need to be part of a movie's title for its producers to gain lucrative Hawai'i state tax credits, under rules proposed by state Film Commissioner Donne Dawson and being studied by the Tax Department.

Dawson hopes that a loosened and broadened tax incentive structure will attract a wider range of Hollywood and foreign film projects.

"It's important to have the incentives," Dawson said. "If not, productions will go elsewhere."

Dawson said film producers who used to be attracted mainly "because they want a great waterfall or a terrific jungle" are now asking: 'What can the state of Hawai'i do to bring our budget down?'"

Producers receive a 4 percent rebate of expenditures and a 100 percent rebate on the hotel room tax by putting a Hawaiian word in a movie's title.

While the original tax incentives were meant as a way to promote Hawai'i, Dawson said the restriction is making the state lose "too many projects that want to use Hawai'i to double for another location."

Dawson said Hawai'i recently lost the $90 million Antonio Banderas/Lucy Liu film, "Ecks vs. Sever," to Vancouver because the Canadian city had a better tax incentive package that, compared to Hawai'i's, saved $4 million to $5 million in production costs.

Hawai'i was expected to double for Bangkok, Dawson said, but when the incentives here weren't as good, the story was rewritten to make it work in Vancouver.

"People are not just coming to Hawai'i because it's a great place to shoot. It has got to make financial sense," she said. "So we have to level the playing field."

Dawson said there are a number of steps to be taken before the proposed changes take effect. The Tax Department's go-ahead would be the first of several necessary approvals, she said.

Dawson hopes the changes will take effect by the end of the year, but she said that could be too optimistic.

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.