A Georgia Bill Could Have Hurt Huge Hollywood Productions And The State's People
Even slightly casual film and TV fans have probably noticed that a number of productions set up shop in the state of Georgia. Even if it's something that takes place in space, a fictional country, or during a zombie apocalypse, Georgia is a state that everyone from Disney to AMC uses to suit those needs. A big reason for this is that the state offers the best tax credits in the United States, and these tax credits help to greatly reduce the cost of a big production.
Well, a recent bill that was proposed by lawmakers in the state nearly upended the whole program, and the ripple effects of that decision would have been massive.
According to The Hollywood Reporter, the state's lawmakers were considering a bill that would have capped film and TV tax credits at $900 million per year. While that still sounds like a lot, it doesn't at all cover what is normally given out by Georgia to various productions, and therein lies the problem. However, the bill has been pulled from consideration for now, meaning that the healthy tax credits the state is famous for will remain in place. For now at least. Senator Nan Orrock supported pulling the bill, and said the following:
"It's careless. It's incautious. It's unwise. It's unfair. People work in this industry all across our state. Our finance committee has a process we agreed on to study the impact of tax credits industry by industry. That has not happened. This was shooting from the hip to absolutely put a poison pill in our film industry structure."
The importance of tax credits
It is not super-important to understand the finer details of tax credits, but, in essence, they allow the production in question to save on taxes in the state, thus making things cheaper. Think of it like a store not ever charging you tax on anything. It would make a big purchase a lot cheaper. Currently, any production that spends at least $500,000 in the state is eligible for a tax break of 20%, and they can get an extra 10% if they include Georgia's peach logo in these projects.
Another huge key is that these tax credits are transferable in Georgia. That means a company like Disney can take these tax credits they receive and sell them for goods and/or services to a company in the state that actually has a tax liability they are looking to reduce. So, you can imagine how these incentives could greatly reduce the overall cost on a $150 million production like an "Avengers" movie.
Georgia first put its tax credits incentive program into place back in 2006. In the years since, it has become a gigantic hub for Hollywood, with Disney setting up a gigantic campus there that almost every Marvel Cinematic Universe movie uses. Other gigantic companies such as AMC make use of these tax credits, with the "Walking Dead" universe filming out there from the very beginning. So yeah, a whole lot of big movies and TV shows have taken full advantage, and it has brought a lot of cash to the state's local economy.
The ripple effect
So, why was this bill to cap tax credits put in place? Senator Chuck Hufstetler said the following, laying out his reasoning for supporting the bill:
"We think that many things shouldn't be paid for by Georgia. I can take any business, say I'm going to pay 30 percent of your costs, and I can probably make it successful. It needs reining in without losing the underlying ability to bring business here."
The difference is that other businesses are going to have a tough time bringing in nearly as much cash to the local economy. The report states that Georgia gave out around $1.2 billion in tax credits last year, which saw around $4 billion spent by the industry in the state. That is a whole lot of money for various industries, not to mention a lot of work for local crew members, which brings up another point.
Part of what makes Georgia so effective for Disney or AMC, which have planted roots there because of the tax credits, is that there are lots of local crews and infrastructure in place to support big productions. If these tax credits were capped, it wouldn't be so easy for these production companies to just move elsewhere. Not only that, but local crews would potentially get a lot less work. Yes, directors might bring a cinematographer and other key crew members with them, but lots of the other positions on a set are filled by local crew, and Georgia has a lot of these workers on hand.
So yes, tax credits may sound boring, but they are a big thing in the industry and they directly impact not only the movies and TV shows you love, but lots of people in Georgia and in other states. For now, this portion of the bill is dead in the water, but the fact that certain lawmakers are looking to curb spending in this area means this could certainly come up again in the future.