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Factors that make film tax credits a win-win for the industry and location (Part Three)


Exploring Georgia’s Film Industry Tax Credits- Part 3

Written by Mollee D. Harper

“So today I say, the outlook in Georgia has never been brighter.” – Roy Barnes

The competition to attract entertainment investments and revenues has been an ongoing race between state governments for many years. With 38 states now offering a wide array of different tax incentive programs for film and television productions, it is prudent to look closely at the programs that are working, and examine the numbers to gage the real economic impact and benefits. What are the factors that make the film tax credit a win-win for the industry and location?

Like other states, Georgia’s film tax credit incentive has many moving parts and variables, but the formula must be right based on its production output in movies and television shows alone. We put Georgia’s film tax credit under the magnifying glass to determine the credit’s significant features compared to those offered by other states.

Georgia’s first tax incentive was a point of purchase sales and use tax exemption first introduced in 2002. The initial program didn’t carry enough zip so policymakers crafted the more progressive Georgia Entertainment and Industry Investment Act (GEIIA), also known as the film tax credit in 2005, revised again in 2008, 2010, 2012 and 2013. The takeaway here is that a lot of time and effort has been poured into this legislation to get it just right by policymakers for their state.

The main backbone to the GEIIA program is in its provision for a 30 percent reduction in corporate state income tax for Georgia-based film and production companies who spend money on production and post-production activities in the state. Many other states offer lower incentives of 10 or 20 percent based on their concern for the lost tax revenue itself. GEIIA grants a 30% incentive through two provisions.

Qualified productions receive a transferable income tax credit of 20% on all in-state costs for film and television investments of $500,000 or more. An additional 10% tax credit is provided for projects that embed a Georgia Entertainment Promotional logo in the title and/or credits. This 10% investment to build Georgia’s film industry brand is important to building the state’s recognition at a national level.

Policymakers made significant revisions to the GEIIA policy over the past decade, including a reduction in annual cap by half, from $25 million to $12.5 million, for expenses incurred before January 1, 2019. Tax credits were also defined as transferable forward up to five years.

Additional amendments made to the current program include eliminating supplemental credits for film projects in economically distressed counties, along with clarifications for qualifying production expenditures, specifically travel. The act was also revised so that projects can be combined to meet the minimum annual spend of $500,000. In 2012, the program was also extended to interactive entertainment companies, commonly known as “gaming companies”.

In 2015, the “Hollywood of the South” surpassed the “Hollywood of the Bayou” and gracefully pushed Georgia’s film industry into the coveted bronze medal as the third largest entertainment producer in the United States, after California and New York. To that point, while Georgia’s film tax credit program is one of the largest incentive programs, it is also one of the most successful incentive programs, with measurable results in productions and revenues.

Join me next week in part 4 of 4 as we conclude the “Exploring Georgia’s Film Industry Tax Credit” Series with the state’s report card on economic growth through this new revenue stream, and the benefits to Georgia’s national recognition as a serious player in the entertainment industry.

Article Reference:

Overview of the Georgia Film Tax Credit

See Part 1

See Part 2


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