Georgia’s base 20% transferable tax credit isn’t that impressive when compared to the tax credits in other top production hubs such as California (20%-25%), New York (30%) and New Mexico (25%-40%). What sets the state’s film and TV production incentive apart is the 10% bump it gives projects for including its Peach State logo in their credits. It’s a “gimme,” an offer no one is ever going to refuse, meaning the state’s incentive is effectively 30%, end of story.
But, in February this year, state legislators introduced a major plot twist in the form of House Bill 1880, which threatened producers’ ability to get that extra 10% and, in turn, and the massive film and TV industry that has been built in Georgia since it established the current version of its incentive program in 2008.
Under the proposed law, productions would have been required to meet four of nine criteria to get the 10% bump. Finding a workable combination to meet the requirement — such as including the peach logo, participating in a state workforce development program and doing 20% of post-production spending in-state and 50% of in-studio shooting in Georgia — wouldn’t have been prohibitively difficult, but it would’ve put a damper on a program popular for its simplicity, as well as its generosity. The latter would have been curbed by the bill’s provision limiting the amount of tax credits that could be sold or transferred to 2.5% of the state’s estimated revenue for the year, effectively capping what for the last 16 years has been an uncapped program. If the formula were to be applied using estimated revenue for fiscal year 2025, it would allow $902 million in credits, more than 27% less than the $1.24 billion the state certified last year, which is more than any other state in the country.
The bill passed the Georgia house on a 131-34 vote at the end of February, before moving on to the senate, where it went through a slew of changes. Eventually, it was combined with a low-income housing tax credit and other unrelated measures in a “Frankenbill,” before dying with the conclusion of the legislative session.
The last notable threat to the incentive came in March 2022, when the state’s senate finance committee voted to cap the tax credit at $900 million annually. The bill was pulled before it could be voted on by the full senate.
“Anybody can come up with a bill and get it way down the road, but it’s going to kind of fizzle out and die if there’s no broad support” says Joel Harber, CEO of Athena Studios in Athens, Ga.
In pure economic terms, the bottom-line benefit of the incentive remains up for debate. Last November, London-based consulting firm Olsberg SPI released a study commissioned by the Georgia Screen Entertainment Coalition, which represents the interests of the major film studios and other industry stakeholders. It found that the incentive has created 60,000 jobs and returns $6.30 for every $1 spent.
The following month, an audit released by Georgia State U. found that the incentive returns just 19¢ on the dollar and costs the state $160,000 for every job it creates.
Perhaps more telling is a survey of 1,000 likely Georgia voters released by the GSEC in March, which found that 82% feared a loss of jobs and 78% feared Georgia businesses would lose out on revenues if the incentive was changed or limited.
“Ultimately, the film tax incentive in Georgia is actually very, very popular,” says GSEC executive director Kelsey Moore. “We saw leadership be hesitant to make changes because nobody wants the unintended consequences of losing or harming the industry.”
Source Agencies
