Haw. Code R. § 18-235-17-11
Example: XYZ Production Company purchased a camera to film an underwater scene of a feature film in Hawaii. The camera was purchased for $60,000 and has a recovery period under the modified accelerated cost recovery system determined by the Internal Revenue Service of 5 years. A deduction under section 179 of the Internal Revenue Code of 1986, as amended, was not taken with respect to the camera. The amount that may be claimed as a qualified production cost in the first year the equipment is used for a qualified production is $12,000, which is the $60,000 purchase price divided by the applicable recovery period of 5 years.
Example 1: XYZ Production Company has cameras that it ships to the State to film a production for six months. All of these cameras were purchased by the production company prior to production in the State and have been utilized as equipment for the past few years on other film projects. These cameras are available on a checkout basis for all productions being created by XYZ Production Company. Assume that the cameras have an applicable recovery period under the modified accelerated cost recovery system determined by the Internal Revenue Service of 5 years and assume further that a deduction under section 179 of the Internal Revenue Code of 1986, as amended, was not taken with respect to the cameras and that depreciation deductions have been taken in prior years. If XYZ Production Company is entitled to take a $1,000 state depreciation allowance for the cameras for the calendar year, XYZ Production Company may claim $500 as a qualified production cost that represents the $1,000 depreciation allowance adjusted for the time the cameras were used in the State.
Example 2: XYZ Production Company purchased a camera to film an underwater scene of a feature film in Hawaii. The camera was purchased for $60,000 and has a recovery period under the modified accelerated cost recovery system determined by the Internal Revenue Service of 5 years. A deduction under section 179 of the Internal Revenue Code of 1986, as amended, was not taken with respect to the camera. The amount that may be claimed as a qualified production cost in the first year the equipment is used for a qualified production is $12,000, which is the $60,000 purchase price divided by the applicable recovery period of 5 years. In the subsequent year XYZ Production uses the camera for the qualified production for six months of the year. XYZ Production is entitled to a $10,000 state depreciation allowance for the camera. XYZ Production may claim $5,000 as a qualified production cost that represents the $10,000 depreciation allowance adjusted for the time the camera was used in the State.
Haw. Code R. § 18-235-17-11