Our movie-making business has been stolen from the United States of America, by other countries, just like stealing “candy from a baby”. California, with its weak and incompetent governor, has been particularly hard hit! Therefore, in order to solve this long-time, never-ending problem, I will be imposing a 100% tariff on any and all movies that are made outside of the United States. – This statement the other day from, Donald J. Trump, the president of the United States of America, triggered a wide range of speculations among the people from the film industries across the world. A lot of discussions are ongoing among the folks from the Telugu film industry as well for the last few hours, about the impact of the said ‘100% tariff’ on the Telugu films’ North America’ theatrical business in the coming days. How exactly is the 100% tariff going to impact Telugu films? Who is going to impact the most, is it the producers? Or the distributors? Or the audiences in North America?
If we consider, Trump’s statement in a literal sense, one of the following two scenarios will be effective in the coming days.
1. A distributor who purchases a non-American-made film for ‘X’ amount from a producer or a studio, has to pay the exact ‘X’ amount as tax to the United States of America’s government. For example, if the distributor purchases a film for $1 million from the producer or the studio, the distributor has to pay an additional $1 million in tax to the government.
2. If a theatre charges, ‘X’ amount as ticket price, then the ticket purchasing pattern, has to pay the exact ‘X’ amount as tax. For example, if the ticket price is $10, the patron has to pay $20, to purchase the ticket.
But, does it make sense to take the statement from Trump in its literal sense? The answer for now should be a ‘No’. Just like, there were differences between the statement made by Trump initially regarding the H1B visas and the eventual guidelines that were released later, there will definitely be differences in the statement he made today about ‘100% tariff’ and the guidelines that will be released soon in this regard. So, taking his statement in a literal sense and speculating things may not be the right thing to do. There will be an impact on the Telugu movies in North America in the coming days in North America. But, we will be able to gauge the severity of the impact, only after the guidelines are released.
As of today, there’s no uniformity on the tax that is being imposed on the movie theatrical business across the states in the United States of America. Some states impose no entertainment tax on the movies and some states impose an 8-15% entertainment tax on the movies. Certainly, Trump and his team, are likely to come up with guidelines to streamline the entertainment tax and establish uniformity across the states. But again, we may have to wait for the guidelines to be released to analyse the impact. For now, everything we hear is mere speculation and assumptions.
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