Western film production company rust It may also have to meet financial obligations to the immediate family of the cinematographer who was fatally shot by Alec Baldwin during rehearsals in 2021, and give up powerful financial incentives to sell the film to a distributor.
New Mexico tax officials said Rust Movie Productions applied for up to $1.6 million in incentives this spring, but it was denied. Associated Press. The deadline for producers to appeal the decision is approaching the end of July.
Meanwhile, Baldwin is scheduled to stand trial next week on charges of manslaughter in the death of Halina Hutchins. Lead actor and co-producer rust As he was aiming his gun at Hutchins, a gunshot was fired, killing Hutchins and wounding director Joel Sousa.
Melina Spadon, an attorney representing the production company, said the film's tax incentives would be used to fund a legal settlement between the producers and Hutchins' widow and son.
“The denial of the tax credits has put a stop to these financial arrangements,” said Spadone, a senior attorney at Pillsbury Winthrop Shaw Pittman in New York and Los Angeles, who helped broker the 2022 agreement that restarted halted production. rust Filmed in Montana with some of the original cast and crew, including Baldwin and Souza, filming wrapped last year.
Terms of the settlement were not disclosed, but the producers said completing the film was done out of respect for Hutchins' artistic vision and to provide income for her young son.
According to court documents, the settlement payment was delayed by up to a year as Hutchins’ widower’s attorneys decided on “next steps,” including whether to reopen the wrongful death lawsuit or start a new claim. Matthew Hutchins’ attorney did not respond to phone and email messages seeking comment.
Baldwin's indictment and the film's tax incentive application both have financial implications for New Mexico taxpayers, with the Santa Fe District Attorney's Office saying it has spent $625,000. rust– Related charges to be filed by the end of April.
The state’s film incentive program is one of the most generous in the nation, offering direct reimbursements of between 25% and 40% on a variety of expenditures to attract film projects, jobs, and infrastructure investments. As a percentage of the state budget, only Georgia pays more in incentives.
This includes a one-time option to assign a payment to a financial institution, which allows the producer to use the rebate to secure production in advance, often adding the right to the rebate and future film revenue to the production loan.
Rebate program beneficiaries include the 2011 film “Cowboys & Aliens” and the “Breaking Bad” spinoff TV series “Better Call Saul.” Currently in production is a new movie set in New Mexico, starring Matthew McConaughey and America Ferrera, about a group of schoolchildren who were rescued from the town of Paradise in 2018, the most destructive wildfire in California history.
Charlie Moore, a spokesman for the New Mexico Department of Revenue and Taxation, declined to comment specifically. rust Citing concerns about confidential taxpayer information, applications are reviewed against a lengthy list of accounting and billing requirements.
According to Moore, 56 film incentive applications were approved in the past 12 months, while 43 were partially or fully denied.
According to documents obtained by the AP, the New Mexico Film Commission issued a memo in January. rust Approved for tax incentive eligibility, the process includes reviewing accounting ledgers, unpaid debts, and adding closing credits to the screen as a filming location in New Mexico. The tax authority makes the final determination as to whether the expenses are eligible.
Spadon, the lawyer rustThe denial was “surprising,” he said, and could have a chilling effect on refund-backed loans that boost the local film industry and undermine confidence in the tax program.
Alton Walpole, a production manager for Santa Fe-based Mountainair Films, was not involved. rustHe criticized filmmakers for seemingly taking safety shortcuts, but said officials had a duty to review tax credit claims only on the basis of legal and accounting principles, or risk losing major projects to other states. He noted that movies are inherently dangerous even if there are no guns on set.
“They'll say, 'Wait a minute, let's go to New Mexico. They might not give you a discount,'” Walpole said. “They're watching every penny.”
“Public opinion? I would say don’t give them a refund. But legally, I think they’re entitled to everything,” he said.
At least 18 states have enacted measures to implement or expand film tax incentives since 2021, but some have gone in the opposite direction and sought to limit the transferability and refundability of the credits.
Under Democratic Gov. Michelle Lujan Grisham, New Mexico has raised annual spending limits and expanded the film tax credit amid a multibillion-dollar surplus linked to record oil and natural gas production. Film rebate payments were $100 million in the fiscal year ending June 2023 and are projected to grow to nearly $272 million by 2027, according to tax agency records and the Congressional Budget and Accountability Office.
State Sen. George Muñoz, a Democrat, criticized the incentive program and questioned whether taxpayers should be held accountable for unexpected costs.
“If there's a problem with a film or a set when it comes to the tax credit, do they really qualify or do they disqualify themselves?” said Munoz, who chairs the Senate budget writing committee.
rust There is no U.S. distributor yet as the producers are submitting the newly completed film to film festivals.