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Georgia film/TV tax incentives revisions pass House and Senate

"The Three Stooges" film, set to come out April 4, was shot in Atlanta partly thanks to a generous film credit. CREDIT: 20th Century Fox

"The Three Stooges" film, set to come out April 4, was shot in Atlanta partly thanks to generous tax credits. CREDIT: 20th Century Fox

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.

The logo you see at the end of films and TV shows shot in Georgia.

The logo you see at the end of films and TV shows shot in Georgia.

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.

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By Rodney Ho, Radio & TV Talk

19 comments Add your comment

Walking Dead Fan

March 29th, 2012
3:20 pm

If Rick Grimes & his band of survivors on “The Walking Dead” suddenly find themselves on a train out of Georgia and headed to the refugee center in Nebraska at the start of next season, Governor Deal’s revision of this bill will be the reason why.

Tammy Hurt

March 29th, 2012
5:21 pm

Good coverage on the film / TV portion of HB 1027, Rodney. However, I would like to point out that there was a big win for Georgia’s music industry by including music in the amendment. By having the legislature rule in favor of music production as a qualified expense, we now have the confidence to market the business-friendly environment that Georgia offers the music industry, which will ultimately create jobs, and significant revenue for the state.

Fred ™

March 29th, 2012
6:24 pm

Hell yeah. As long as Nathan Steal and the rest of the republican majority get paid and paid well who CARES what it costs the rest of the State and us taxpayers footing the bill who actually DO pay the taxes that these rich film makers don’t. WOO HOO!!!!!!!!!!!!

Fred ™

March 29th, 2012
6:25 pm

Tammy Hurt obviously is one of the paid off ones. Using MY tax dollars to post. I love it………

[...] ensure the state is getting proper promotional value from production … Read more on Atlanta Journal Co g>Satellite-TV Hacking Allegations Return for Murdoch The company makes access cards used by [...]

Jack

March 29th, 2012
7:11 pm

I’m with Fred. Finding out that these high paid movie stars have not been paying Georgia income tax for the work done here is outrageous. 6% is not that much to have to pay when you’re making millions. Plus, the production got 30% in credit off that salary! Another example of government helping the rich get richer with poor peoples money.

Bill Johnson

March 29th, 2012
7:18 pm

—-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.”—-

With how problematic this will now be to obtain the additional 10% I think Georgia will be loosing productions.

Austin

March 29th, 2012
10:48 pm

I think Adrian McDonald is being sarcastic.

[...] the article here: Georgia film/TV tax incentives revisions pass House and Senate – Atlanta Journal Constitution … Tagged as: credit, georgia, house, incentive, includes, logo, production, senate, show, state, year [...]

Lia Towers

March 30th, 2012
9:50 am

Unless you’re actually in the industry you probably wouldn’t understand how much money is actually spent in the state that does accrue taxes for the state. There are thousands of dollars spent in permits, location fees, hiring police offices and fire fighters. Then the cast and crew spend money in the state buying every day goods. The production company spends money in hotels and rental cars. Local businesses see a bomb in business when a production is in town. And depending on how long a production is in town, cast and crew do have to pay state taxes, typically it’s 6 months. Those are the reasons states offer these incentives, to compete with other states in keeping those film crews in their states.

Harold

March 30th, 2012
10:08 am

Lia is RIGHT! It’s called trickle down economics. The rich people get the tax breaks, and spend their money which benefits everyone!! Listen to Lia!! Trickle Down economics!! This is proof that trickle down economics DOES work!!

JSS

March 30th, 2012
11:47 am

It is neither trickle down economics nor is it a tax break for rich filmmakers. It is indirect tax stimulus. And in this case unlike the huge tax credits to raiding manufacturing sector firms; these incentives put actual Georgians to work. They make a difference!

Frank Brown

March 30th, 2012
12:47 pm

So JSS, you’re saying the way the benefit works is not by trickling down the money? It’s quite obvious that’s exactly how it’s suppose to work. Tax breaks are given that bring big money here. That money gets spent. The claim is that the money that is spent by the big rich on things like food and cars, give other people jobs. That’s trickling the money down. Don’t choose to not use a term because it doesn’t fit with your political view. That is ignorance. The expectation is that the money will trickle down to employees at restaurants, hotels, hardware stores etc… That’s how it works, I’m sorry to have informed you. What you believe about trickle down economics is broken.
It does put some Georgians to work, but a major majority of the payroll is spent on out of state hires. People they bring into the state. Such as the Actors, Directors, Producers, Department heads, even further down the line. They will bring in as many friends and family as they can because there is nothing to prevent them from doing it. Most shows Payroll pays more money to non residents of Georgia than it does to residents, and that’s a fact.

Wounded Duck

March 30th, 2012
3:57 pm

All of the people who keep calling this a “tax break” need to stop. It’s a cash subsidy, plain and simple. A $100 million film costs the producers $70 million, because Georgia’s taxpayers kick in the other $30 million. It’s a stupid giveaway: http://filmworks.filmla.com/2012/03/16/runaway-production-its-not-about-lower-taxes-its-about-cash-handouts/

[...] Atlanta Journal Constitution (blog) [...]

Robert

March 31st, 2012
2:39 am

This is a smart investment by the state IMO. Once a community establishes itself as a lower cost place to produce motion pictures, word will spread and studios will follow in increasing numbers. It is about far more than the money paid to “stars” appearing in the film. It is the money the production companies pay to caterers, stylists, hotels, transportation companies, etc., etc. Helping even more is the fact that LA and California have become an increasingly expensive place to do productions, making Atlanta even more competitive.

snottrocket

March 31st, 2012
10:01 pm

It’s not as effective as ‘trickle down’ when a full fledged studio with resources isn’t here…the only one that I can think of off the top of my head is screengems and Tyler Perry. What this law can do is motivate more studios to open satellite locations, etc. But it seems clear that the logo at the end of the movie credits isn’t a huge thing to ask for and can be of great benefit to the state’s film industry. You see it all the time for movies shot in Canada or other countries. The GA logo should be there too.

[...] have passed  a bill to modify the Peach State’s film incentive program so that it “better ensures the state is getting proper promotional value from production companies.”  The bill also ensures that the amount of money Georgia will offer producers has no [...]

Bemused

April 1st, 2012
8:44 pm

Having been one of those highly paid extras ($8.00) per hour I can tell you the film industry is a great boost to the economy, with or without the credits at the end of the movie – movie makers come here and bring their money, they hire extras, hire standins and crew, they eat, they buy gas, they hire cars, they stay in hotels. How is that a problem? Give ‘em tax breaks it is a win win situation.