FLORIDA, LOUISIANA AND NORTH CAROLINA STRUGGLE TO KEEP PRODUCTIONS: GEORGIA SCOOPS UP THE WINDFALL.
As Louisiana fights to restore some of its lost productions following a recent reduction in funding for the state’s film tax incentive program, other southern states are feeling the impact of reducing or ending their film tax credit programs as well.
In addition to Louisiana, Florida and North Carolina are feeling the bite as their once thriving film and entertainment business moves elsewhere in the absence of a film incentive program.
NORTH CAROLINA AND FLORIDA’S TAX INCENTIVE ISSUES
Since 2007, North Carolina’s offered a tax incentive program that offered a 25 percent credit to Film and TV productions that shot in the state. In 2014 that covered $300 million in expenditures. The Winston Salem Journal reported that between the years of 2007 to 2012, the entertainment industry spent more than $1 billion in the state, generating $58.3 million in tax revenue. TV shows such as “Under the Dome” and “Sleepy Hollow” were happy to shoot in North Carolina. The Motion Picture Association of America, estimated that the industry sustained more than 4,000 jobs.
But at the end of 2014, North Carolina’s General Assembly dramatically reduced the size and scope of the tax incentive, opting instead for a grant-based program that was worth only $10 million annually. This shift essentially crippled the film industry in the state, and it has yet to recover.
Florida is in a different situation, but it equally feeling the impact of an impotent film tax incentive program. While a generous tax incentive 20 to 30 percent transferable tax credit remains available to productions that shoot in the Sunshine State, funding for that program dried up in 2014, effectively killing the program until more funds are allocated. Florida had initially set aside $296 million to last through 2016. (UPDATE: North Carolina has funded Funded at $30 million per year for the 2015-16 and 2016-17 fiscal years, down from FY2014 funding of 60.3 Million )
GEORGIA’S THRIVING FILM TAX INCENTIVE PROGRAM
The big winner in all of this appears to be Georgia. The Peach State continues to grow its film and television business and the state leaders continue to fund and the generous tax incentives.
In 2014, Gov. Nathan Deal feature films and television productions shot in his state “generated an economic impact of $5.1 billion during Fiscal Year 2014. The 158 feature film and television productions that shot in Georgia spent $1.4 billion during that time.” According to Georgia.org, FY 2015 saw 6 Billion in economic impact from Georgia-lensed feature films and television productions.
KPM FILM’S TAKE
Even the threat of potential shifts in the tax incentive environment can have significant impact as studios plan principal photography on upcoming projects. Florida, Carolina and Louisiana’s public concerns over the perceived cost of the film credit have cost the states millions and helped Georgia grow from $3.4 billion in 2013 to more than $5 billion in 2014.