Heeeere's. . . Jimmy!

by Kenneth Hoffman in , ,

Newsman Edward R. Murrow famously said that television is a vast wasteland. But that doesn't stop millions of Americans from tuning in every night for their favorite comedians. Jay Leno, David Letterman, Conan O'Brien, the two Jimmies (Fallon and Kimmel) and their wannabe imitators squeeze out one last wisecrack before bedtime.

NBC's Tonight Show has been broadcasting since 1954, which makes it the longest-running entertainment program on air. Amazingly, it's had just five hosts since it's inception: Steve Allen from 1954-57, Jack Paar from 1957-1962, the legendary Johnny Carson from 1962-1992, Jay Leno from 1992-2009, and Conan O'Brien for eight short months in 2008-2009. Leno returned in March of 2010, but, in Hollywood's worst-kept secret, announced last week that he would be giving up his chair to current Late Nighthost and Capitol One pitchman Jimmy Fallon. Leno congratulated Fallon in his monologue last Wednesday: "I just have one request of Jimmy. We've all fought, kicked and scratched to get this network up to fifth place, okay? Now we have to keep it there. Jimmy don't let it slip into sixth. We're counting on you." 

And more news . . . the show is leaving its studio in "beautiful downtown Burbank," California, where it's made its home since 1972, and returning to New York's 30 Rockefeller Plaza. There are lots of reasons to move back to the East Coast. Lorne Michaels, the producer behind NBC's longtime New York-based Saturday Night Live, is taking over at The Tonight Show, and host Fallon is already headquartered there. But there's one more behind-the-scenes reason that may be more important than all the rest. That's right, the tax man is welcoming The Tonight Show back with open arms! 

Hosting a program like The Tonight Show is big business, and states naturally compete for it. New York decided to play hardball, and Governor Andrew Cuomo and the New York state legislature passed a sweetheart tax deal, dubbed the "Jimmy Fallon tax credit," to lure The Tonight Show back. The credit is available to "a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season in New York." The show has to have a budget of more than $30 million or drop at least $10 million in capital expenses every year. It has to be filmed before a studio audience of at least 200 people. The credit is worth 30% of production costs. Remember, a tax credit is a dollar-for-dollar reduction in tax, not a deduction from taxable income. Assuming the show spends $30 million on production, that means $9 million in New York tax savings to parent company NBC. That's not a bad little bonus for a program that's estimated to make between $25 and $40 million per year! 

That's some suspiciously targeted legislative language, isn't it? It doesn't have the broad reach of, say, "Congress shall make no law . . . abridging the freedom of speech." But it got the job done, and Governor Cuomo issued the following statement: "The original Tonight Show ushered in the modern era of television, broadcast here from New York. It is only fitting that as The Tonight Show returns to our state, it will be headlined by New York's own native son and resident, Jimmy Fallon. Today's announcement builds on the recent surge of television and film production happening here in New York that has restored our state as a global film production capital and driven the creation of new jobs and business growth throughout the state. I welcome The Tonight Show home." 

We talk a lot here about tax planning. We're glad to see the folks at The Tonight Show listen! Keeping up with new opportunities is an important part of our job. We can't always find you million-dollar credits, but we can promise a proactive attitude. So call us when you're ready to pay less!

Kenneth Hoffman of K.R. Hoffman & Co., LLC is a highly sought after tax and business counselor. Counseling Entrepreneurs, Professionals and Select Individuals who are struggling with ever changing tax laws and who are paying too much in taxes. All the while he is protecting his clients from the IRS and other taxing authorities using proactive tax planning strategies, ensuring compliance with minimal tax liability. 

Discover how I can help you overcome your tax and business challenges. To start the conversation or to become a client, call Kenneth Hoffman at (954) 591-8290 Monday - Friday between 8:30 a.m. to 1:00 p.m. for a no cost consultation, or drop me a note.

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