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Saturday, August 2, 2014
Georgia looking to expand film industry tax credits
At a time many states are eliminating or scaling back their film industry tax credits, Georgia lawmakers may expand the Peach State’s film tax incentives to further encourage an already rapidly growing industry.
A legislative study committee created during this year’s General Assembly session will begin meeting this summer to consider proposals to expand Georgia’s film tax credit program to pick up portions of the industry not covered by incentives enacted six years ago.
“What we missed the boat on is our home-based smaller companies that don’t do the $500,000 minimum you’ve got to do to take advantage of the credit,” said Georgia Rep.Ron Stephens, R-Savannah, who will chair the study committee. “We’ve got to incentivize them more.”
The numbers tell the story of the growth of film and TV production activities in Georgia. The industry’s direct economic impact in Georgia nearly doubled from $132.5 million in 2007 to $260.4 million in 2008, the year the General Assembly passed legislation offering tax credits of up to 30 percent to companies producing feature films, television series, music videos or commercials in Georgia.
That growth has continued at an exponential rate to $933.9 million in direct economic impact last year.
Entertainment executives who have set up shop in Georgia say the willingness of states to offer tax incentives has become the top consideration for producers looking for locations to shoot.
“That’s all the studios look at,” said Steve Basso, general manager of Paskal Lighting, a film industry supplier with an office in Norcross. “They want to know where they can get the most for their money.”
Case in point: John Raulet, co-owner of Mailing Avenue Stageworks, an 85,000-square-foot motion picture and television production facility in the Grant Park area of Atlanta, said he got a phone call recently from a location scout who had been hired to fly to Atlanta to find a spot that looked like, of all places, Pakistan, for a film set in the Middle East.
“A bean counter in L.A. said, ‘I want to know if it’s there or not,’ ” Raulet said.
While Georgia wasn’t suitable in that instance, it does fit the industry’s needs more often than not, Raulet said.
“We have a lot of things here that put us a step ahead ... the busiest airport in the world with umpteen flights a day to L.A., oceans, urban, mountains, pretty much everything you want to find,” he said.
While Georgia’s film tax credit program continues to attract more investment from movie-makers, some states are ditching or reducing their incentives. During the past few years, Arizona, Idaho, Indiana, Iowa, Kansas, Missouri and Wisconsin ended their programs, according to a survey the National Conference of State Legislatures released in March.
Closer to home, lawmakers in North Carolina converted their film tax credit to a grant program, a move that threw up additional hurdles to producers. And the Florida legislature failed to fund that state’s incentives program this year when a dispute between the two legislative chambers wasn’t resolved by the end of the session.
Steve Weizenecker, a partner in the entertainment and music practice group in the Atlanta office of Barnes & Thornburg LLP, said opponents of business tax incentives in general are behind those states’ decisions to dump film tax credits.
“It seems like the far left and some on the extreme right ... throw everything under the ‘corporate welfare’ banner and attack it without understanding what it is,” he said.
Wilbur Fitzgerald, chairman of government relations for the Georgia Production Partnership, a coalition of companies and individuals active in the state’s film, video, music and interactive game industries, said he met with several producers out of Wilmington, N.C., recently who told him they were planning to relocate to Georgia because of uncertainty over the future of North Carolina’s film tax credit.
“We will be strengthened by the collapse of North Carolina and Florida,” he said. “Some of their talented people will be looking for work in Georgia, and they’ll find it.”
Stephens said his idea to lower the monetary threshold for companies to qualify for Georgia’s film tax credit would allow smaller Georgia-based businesses that specialize in post-production to take advantage of the program.