Georgia Rethinking Filming Tax Credit

This recent AP article states that a “Georgia state council” is rethinking the state’s aggressive tax credit program that’s been attracting film production companies to the state over the last couple years.  As we all know, Decatur’s been just one beneficiary on the credit, most recently hosting a Jennifer Garner film over on Pinetree Drive.  Why are they rethinking the credits?  Well, that’s not all that clear…

In January, though, a Georgia state council said those benefits are fleeting. It said even though the crews bring jobs — and lots of people who spend money locally on food and lodging — those benefits are lost when they pack up and leave after filming.

The council recommended ditching the film tax break, which meant $140.6 million in lost tax revenues last year. Film producers spent $617 million in Georgia last year.

The article goes on to provide first-hand accounts of all the ways the film tax credit is creating jobs in the state and how other states are also implementing similarly tempting tax credits to movie-makers.  However, the one important item missing from this article is “What the tax revenue was prior to the creation of the more aggressive tax credit in 2008?” If it was far less than $617 million, than that $140.6 million in “lost tax revenue” wasn’t actually “lost” because without it we wouldn’t have the additional revenue in the first place.  Weird.

27 thoughts on “Georgia Rethinking Filming Tax Credit”

  1. We’ll probably lose a lot of film industry jobs, but It’ll all even out in the end from all the jobs cutting down trees near billboards is going to generate.

  2. What they fail to realize is that the business would never have come to GA without the tax credits, therefore they did not loose $140 million because they would have had no business to tax!

  3. The only thing “fleeting” here is the intelligence of our illustrious state legislators. Talk about the state cutting off its nose to spite its face. Because making this move worked out SO WELL for Michigan.

    I’ll tell you one thing: If this tax credit goes bye-bye, so does the huge production studio at Lakewood that everyone was pointing to as a sign of resurgence and a source of jobs in a long-overlooked part of the city. Whoops.

    But at least you’ll have all that tax revenue you didn’t actually have before and now won’t have again to console you, Mr. Legislator. Good job!

    1. The creative thinking of our representatives on both a local and a national level never ceases to humiliate me.

  4. Now, now…if you guys would just stop thinking that our legislators have any ability whatsoever to actually understand the economics involved in this issue, you could avert the headache that you rightly feel blossoming in your skull. Of course, that’s why we put them in charge of the whole thing in the first place. (extreme sarcasm intended)

  5. I have a huge philosophical problem with these tax credits. As noted above, other states are considering offering similar such inducements. What tends to happen is that competition drives the size of the tax credit higher until eventually (we see this in states competing for auto manufacturers and corporate/r and d headquarters) the tax credits end up costing more than we benefit from the activity generated by the credit. So in the end, the primary result is to transfer government tax money to commercial enterprises.

    That said, I don’t actually know what the best action is for an individual state. It is a kind of prisoner’s dilemma…

    1. While I agree with you about the cannibalistic race-to-the-bottom tendency of states regarding car plants and such, I’m not aware of any significant up-front-costs (land, job training, cash payments) being burdened by the average taxpayer when it comes to film production here in Georgia. If so it seems like anything the state can pull in is pure economic gravy. Oh, and let’s not forget about the hip cool zombie factor!

      1. That’s correct. Viewed from Georgia, it is a gain. Viewed from the film industry and nationally, it is still a loss. I mean, the companies are not going to stop filming in the US, although in theory they could do some filming in Toronto and Vancouver as they’ve done in the past. But in general, they are going to do it and they are going to pay the requisite taxes to do it because it is just part of the expense of production. But if an individual state will offer a break, then they will be happy to hang onto the money by filming there. In that sense, it is a transfer from the state that would have been the location with no breaks, and Georgia. It is totally understandable as a GA resident to call this a win, but nationally it is a stupid transfer of taxpayer money to commercial enterprises.

        But, as before, I know that we live in an imperfect world, so hurray for Atlanta catering business! (and so forth…)

  6. Everytime I read the paper, our tea party darlings in the GA Legislature are proposing new and/or more taxation. Tax satellite TV reception, tax gasoline per price, increased cigarette tax, noa a tax on movie production.
    One thing in common is that these activities do not cost the state anything. It’s just a money grab.

    1. I am reminded of Mayor Quimby’s behavior in the “Radioactive Man” episode of “The Simpsons.”

  7. Is this related to the new tax on groceries (and services of all kind)s and the lowering of the tax rate for corporations?

        1. Did you add an “i” to your name? I always read it as Ridgelandstan, rather than Ridgelandistan. Or have you become a new country, somewhere between Afghanistan and Tajikistan?

          1. I think it’s always been that way, Token. Either that or I was seeing I’s that weren’t there myself

            1. Okey doke. Guess I always pictured some guy named Stan who lives on Ridgeland.

              1. No, it’s the formerly Soviet republic, now country of Ridgeland, which I guess makes Decatur a continent and the area west of Westchester is Siberia.

      1. What’s not to love about the black market? You can find things there that you can’t get anywhere else.

        1. Well, there’s no correlation because Fair Tax does not exist, but it is generally agreed that the black market would expand if Fair Tax were implemented. Google Fair Tax and black market.

          1. There’s always going to be a black market, regardless of tax structure, country, etc. I don’t think it would expand if the Fair tax were implemented.

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