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Nasir and Matt welcome Steve Rothschild to discuss the film tax credit bill recently passed in California, as well as the importance of transferrable tax credits to businesses. They also answer, "I received a demand letter from an attorney that is asking for way more money that I would ever be responsible for. What should I do about this?" Full Podcast Transcript NASIR: Welcome to Legally Sound Smart Business. This is Nasir Pasha. MATT: And this is Matt Staub. NASIR: This is our business podcast where we cover business legal news and also answer some of your business legal questions that you, the listener, submits to ask@legallysoundsmartbusiness.com. We are at the mid-week point, Episode 50. That’s a lot of episodes. MATT: Yeah, pretty crazy. It’s a semi-milestone. NASIR: I thought 48 episodes was a lot but 50 is just… I think we should just stop. It’s too much. MATT: Yeah, we’ll see how this one goes. If it’s the best one, we’ll stop at 50. NASIR: That’s a lot of pressure. MATT: Well, let’s get into the story that we have for today. The story here is the one that was in California. Senate passes film tax credit bill which basically is trying to keep filming and production in the state or give incentive for the filming and production to stay in California. Obviously, in California, we have Los Angeles, Hollywood, there’s lot of companies, lots of actors here. There’s no reason to let them leave but a lot of them are leaving for these tax credits that are in different states. I know there’s a few states in the country that a lot of places film but California is just trying to keep this in in order to generate more money, help the economy. It’s obviously struggling in California but I think this is a good thing for a lot of people, especially for California. NASIR: Yeah, absolutely. I think it’s going to cost quite a bit to California off the bat because of the hikes but they also have additional incentive for production companies that are actually moving into California. This started me thinking about tax credits in general. I don’t think businesses realize how many different tax credits for all these little things are there and I wanted to bring in Steve from State Tax Credit Exchange. He’s a tax credit clearing house. Steve, welcome to the program. STEVE: Thank you. Good to be hear. NASIR: Obviously, there’s always going to be legislation in different states that gives different tax incentives to businesses. You’re an expert on tax credits. Why don’t you tell us a little bit about tax credits in general and also how you’ve been dealing with it in your business as well? STEVE: Tax credits are obviously incentives by typically the states such as the state tax credits – typically by the states – to foster growth in certain industries. The feds have also tax credits to foster growth in particular industries as well. Some of them are for more social reasons such as affordable housing. Others are for more business development – call it jobs which would be the film and entertainment tax credit. Certainly, California is trying to keep the flood of folks from leaving the state of California to other states as film production and technology has been a little easier to do on an international basis for that matter. It’s not as essential to film in the state of California. Other talent is now national and international as well. Some actors and actresses as well are not living necessarily in the state of California. That has been an issue where California has struggled to keep these folks and there’s now infrastructure being generated – or should I say built – in places all over the world. Our company as an exchange or clearing house, we basically take the tax credits that have been generated by these companies and we sell them or transfer them to other taxpayers – they could be individuals or businesses that have tax liability. These incentives that we only work with are ones that are transferrable by law.