The digital side of magazines gets a tax break

Although it has apparently been available to them for some time, magazine publishers in Ontario were today briefed for the first time on the Ontario Interactive Digital Media Tax Credit (OIDMTC). It is administered by the Ontario Media Development Corporation and, in a session co-sponsored by Magazines Canada, the rules and regs of the program were outlined.

• It is available to for-profit magazine companies to develop web-based and digital extensions of their traditional print business (the credit is also designed to serve game developers and the like);
• It is only available to companies that pay or are eligible to pay corporate income tax in Ontario;
• The tax credit will pay down any tax owing and the balance will be paid by cheque to the magazine.
  
• It is restricted to titles with gross revenues of less than $20 million and total assets less than $10 million. (In other words, most Canadian magazine publishers);
• It allows companies to write off 20% of their eligible labour expenditures
  
• Marketing and distribution expenditures are also eligible to write off 20%* to a maximum of $100,000 on the qualifying digital media products;
• Such writeoffs are available for expenditures going back 24 months, but can only be applied for every two years;
• *Depending on passage of legislation that is now in second reading in the Ontario legislature, some magazines will likely be able to claim an addition 10% (for a total of 30%) because they fall within a small business provision proposed in the latest Ontario budget;
• Eligible labour expenditures can be 100% of staff salaries and wages and 50% of freelance payments to create and market the digital media products;
• The magazine must be incorporated and submit an application in order to receive a Certificate of Eligibility.

If you'd like to know more, you can call OMDC at 1-800-560-0695 or (416) 314-6868 or go to the website www.omdc.on.ca . The acting team leader for the OMDC tax credits department is Monica Szenteszky.

As has been noted before in this space, the magazine industry is the only cultural industry in Ontario that does not have a tax credit applied to it. This nod to digitized spinoffs such as magazine websites is a good, but half measure, and the industry will undoubtedly be pushing for equal status with such industries as film and books.