Productions Flee to NM and CA as Texas Cuts Back Film Tax Credit Program

The Leftovers, American Crime and From Dusk Til Dawn have all relocated out of Texas

Texas, a long time haven of film tax credits for filmmakers fleeing California, has begun to feel the sting as they made cuts to their own program in 2015.  The Lone Star state passed its incentive program in 2005 and since then has reaped many of the benefits to the local economy, but with California expanding its credit in 2015 to bring filming back to Hollywood, filmmakers are seeing greener pastures on the west coast and in other states.  The TV and film production industry along with the digital and gaming sector challenged lawmakers to determine how best to award credits through the Texas Moving Image Industry Incentive Program (TMIIIP) between the two industries.  Lawmakers responded by cutting the budget for the annual credit from $95 million for 2014-15 to just $32 million for 2016-17. The program had been expanding in recent years growing to $95 million in 2014, from $32 million in in 2013, however the credit allocation has varied year to year and that lack of commitment to the program has caused many filmmakers to move elsewhere.

Film Credits in California, Georgia and New Mexico are Winning Business

The guidelines of the TMIIIP have always made Texas a better location for television rather than movies by only allowing Texas resident wages to be eligible for the credit; a stipulation meant to keep most the benefits of production in Texas on a rolling basis. The resident requirement has helped build a permanent film industry, especially in Austin and Houston; however, the industry has started to wane as productions leave for New Mexico, California, Georgia and even Australia. The City of Austin hosts a prestigious film festival every year and stands to lose economic benefits should filming continue to leave. “American Crime,” an anthology series on ABC, filmed its first two season in Austin, but has decided to move to California where they will received approximately $5.2 million in film credit incentives. Additionally, “The Leftovers,” which also had filmed its first two seasons in Austin, relocated to Australia for season 3 along with “From Dusk Till Dawn,” another series that moved to New Mexico.

TMIIP Created 640M and 10K Jobs

Proponents of the tax credit program, such as the Texas Motion Picture Alliance (TXMPA) would argue that the program provides long-term benefits. The TXMPA is a non-profit that works with the state legislature on behalf of Texas resident employees and businesses who benefit from the program and pushes for consistent funding for the TMIIP.

According to a study of the economic impact of the TMIIP, from 2007 to 2012, the film industry in Texas created approximately $640 million in direct economic output, along with 9,688 full time equivalent (FTE) jobs and over $1.3 billion in total output and 15,063 FTEs, when including indirect and induced effects.


KPM’s Take

In addition to the TXMPA numbers above,  another study estimates that $58.9 million in state and local revenue was attributed to production related spending through state taxes and direct payments to various localities.  These tangible benefits to the state economy seem worth preserving, but as California, New York, Georgia and other states reinforce their film tax credit incentives; states like Texas that cut their programs will be hard pressed to attract filmmakers.

Considering Texas for your Next Film or TV Project?

For more detail on the Texas Film Tax Credit check out our interactive State Tax Credit map. If you’re looking at alternative locations for your next film or TV project, talk to one of practice leaders about the potential benefits at (781) 849-5357 or