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'House of Cards' producers want more tax breaks - or else -report

Source: Reuters - Fri, 21 Feb 2014 08:15 PM
Author: Reuters
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By Susan Heavey

WASHINGTON, Feb 21 (Reuters) - The production company behind Netflix Inc's political thriller "House of Cards" is taking a step that could have come straight from the show's script: threatening to move filming from Maryland unless lawmakers provide enough tax breaks.

Representatives for a top state lawmaker and Governor Martin O'Malley confirmed on Friday that Media Rights Capital had informed them that it was halting production plans until the dispute is resolved.

In a letter that echoes the wrangling seen in the Emmy Award-winning series, the Beverly Hills, California-based company urged the state to pass a law increasing tax credits available for film and television production there.

"In the event sufficient incentives do not become available, we will have to break down our stage, sets and offices and set up in another state," the company wrote in the undated letters, which officials received in late January.

The Washington Post published the letters earlier on Friday.

A Media Rights Capital representative confirmed the letters but said the company had no other comment. In the letters, production officials did not specify the amount of tax credits they were seeking.

The second season of "House of Cards," which has a particular following in the U.S. capital, was released on Feb. 14.

Starring Kevin Spacey as underhanded Washington politician Francis Underwood and Robin Wright as his cool-as-ice wife, the series has dramatized the uglier side of the U.S. government.

Media Rights Capital had been planning to start taping the next season this spring but put that on hold until June "to ensure there has been a positive outcome of the legislation," it wrote.

Two pending bills would increase tax credits for film and television production, but state lawmakers have not agreed to continue them at current levels.

Maryland already agreed to provide $25 million overall in such tax credits this year, according to the Washington Post, adding that "House of Cards" got $11 million in credits for its first season and could get $15 million back for its second one.

According to the Post, state officials said the show had added $250 million to the local economy and want to offer the production company $15 million in breaks again.

O'Malley's spokeswoman, Nina Smith, said the governor's office was aware of the letter. While film tax credits are important, the state is also interesting in investing in other areas such as biotechnology, aerospace and manufacturing, she said.

"We remain hopeful that we can reach a positive resolution," she added.

Maryland House Speaker Michael Busch, who also received the letter, "is focused on maintaining a competitive film program while being sensitive to the constraints of the state's budget," said his spokeswoman, Alexandra Hughes.

Backers of such production tax credits say they help create jobs and boost the local economy. For Maryland, they have helped attract production companies to historic Baltimore and other locales to tape numerous movies and shows, including HBO's "Veep."

But some critics challenge the fiscal responsibility of giving away too much.

"We're almost being held for ransom," state Delegate Mark Fisher, a Republican from Calvert County, told the Washington Post.

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