Creative Relief and Expensing for Audio and Television Enterprises Act; CREATE Act
Summary
The CREATE Act (S. 2530) proposes amendments to Section 181 of the Internal Revenue Code of 1986, specifically targeting qualified audio and television productions. The bill seeks to increase the expense limitations for these productions and extend the termination date of the provision. It adjusts dollar limitations and includes an inflation adjustment for taxable years after 2026.
Expected Effects
The primary effect of the CREATE Act is to provide greater financial incentives for audio and television productions within the United States. This would be achieved by increasing the amount that can be expensed and extending the period during which these expenses can be claimed. The inflation adjustment ensures that these benefits keep pace with economic changes.
Potential Benefits
- Increased Investment in Audio/Visual Productions: Higher expense limits could attract more investment in film and television projects.
- Job Creation: Increased production activity may lead to more jobs in the entertainment industry.
- Economic Stimulus: The entertainment industry can stimulate local economies through spending on goods and services.
- Long-Term Stability: Extending the termination date provides long-term certainty for production companies.
- Inflation Adjustment: Ensures the tax benefits remain relevant over time.
Potential Disadvantages
- Potential Revenue Loss: Increased expensing could reduce federal tax revenue.
- Complexity: The inflation adjustment mechanism adds complexity to the tax code.
- Favoritism: The bill specifically targets the audio and television industries, potentially creating an uneven playing field.
- Limited Scope: The benefits are limited to 'qualified productions,' which may exclude smaller or independent projects.
- Risk of Abuse: Higher expense limits could create opportunities for tax avoidance or fraud.
Most Disadvantaged Areas:
Constitutional Alignment
The CREATE Act falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the US Constitution. The bill aims to promote the general welfare by incentivizing economic activity in the audio and television industries. There is no apparent conflict with any specific constitutional provision.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).