The Senate and House have passed revisions to the Georgia TV and film tax incentives program that will keep it alive but provide more safeguards to better ensure the state is getting proper promotional value from production companies. Gov. Nathan Deal is expected to sign the bill.
The bill keeps a 20 percent tax credit for qualified production companies that spend at least $500,000 here in a given year. It also provides a bonus 10 percent tax credit on top of that if the film, TV show, music video or video game includes a special peach logo to promote Georgia tourism.
Georgia provides among the most generous incentives available worldwide. There are no caps to how much an individual film production company can accrue in tax credits. (Gaming companies with annual revenues of $100 million qualify for up to $25 million.)
The original version of the bill passed in 2008, generating a cavalcade of films and TV shows coming to the state, siphoning business from rivals such as New York, Louisiana and Vancouver, as well as Hollywood.
“It shows there’s good support across the board in the House and Senate in maintaining the incentive,” said Craig Miller, a board member of the Georgia Production Partnership, which promotes film-making in Georgia and owner of Craig Miller Productions. “The changes are reasonable for everyone involved.”
He hopes that as a result of this bill, the state will leave the film and TV business alone to grow for at least a couple of years and not create any temptation for production companies to go elsewhere.
For the calendar year ending June 30, 2011, Georgia handed out about $200 million in tax credits for $689.3 million in qualified production dollars. The Georgia Film, Music & Digital Entertainment Office estimates this has generated more than $2 billion in overall economic activity.
Some lawmakers questioned the efficacy of the promotional logo because most films tended to place it at the very end of the credits. The bill requires the promo logo “in the end credits before the below-the-line crew crawl” and “includes a link to Georgia on the project’s web page.”
In many cases, this is not possible so a production company can provide “alternative marketing opportunities to be evaluated by the Georgia Department of Economic Development to ensure that they offer equal or greater promotional value to the State of Georgia.” The Department of Economic Development will compile an annual report detailing the various marketing opportunities for “the House Committee on Ways and Means, the Senate Finance Committee, the Senate Economic Development Committee, the House Committee on Economic Development and Tourism, and the Governor.”
Actors who come in from out of state and work on a film or movie will also now be required to pay withholding taxes in Georgia rather than their home state. This change will benefit Georgia but not cause any major issues with the film production companies.
A sweeping tax bill that aims to help manufacturers in the state of Georgia also includes a provision which deletes the sales tax exemption for qualified production companies who, say, purchase lumber from Home Depot for sets or wardrobe from Target for extras. In a previous conversation, Ric Reitz, a local actor who helped create the 2008 bill, estimated that this would cost production companies about 1 to 1.5 percent of their budget but since this isn’t a common provision in other locales, its omission wouldn’t cause a mass exodus of filming in Georgia.
Adrian McDonald, who works at the Los Angeles film permitting office (FilmLA) tracking film production worldwide, said in general, states on tight budgets have been scaling back tax credits for film and TV production, benefiting Georgia. Among those who have cut back since 2010: Michigan, Arizona and the Canadian province of Saskatchewan.
While the $200 million Georgia gives to the production companies is money that could have been spent elsewhere, that diffuse loss means no distinct special interest groups will yell foul.
Hollywood films and TV shows are sexy and many of the productions (and actors) are very public. Clint Eastwood pops up at Cafe 290. John Travolta shops at Phipps Plaza. Every day, there are at least a half dozen sites around metro Atlanta packed with trailers and signs to direct extras to specific parking. “It makes it look like lawmakers are doing something,” McDonald said. “It’s exciting.”
The Motion Picture Association of America, which represents the largest film companies such as Paramount and Walt Disney, declined to comment, awaiting until the bill is signed by the governor.
The full text of the bill can be found here.
By Rodney Ho, Radio & TV Talk