ATLANTA, Ga. (Atlanta News First) – Georgia’s lucrative film tax credits – some of the most generous in the nation – were under the microscope of state lawmakers at a hearing in Athens on Wednesday.
In a packed room at Athens Technical College, the Joint Tax Review Committee, made up of a handful of lawmakers, heard testimony from tax professionals, the state’s Department of Revenue, and members of the film and production industry.
The credit allows production companies who agree to shoot content in the Peach State can reap a 30% tax break on their bottom line.
By the numbers, the tax credit has created a booming film and production sector that’s led to Georgia’s crowning of the Hollywood of the South. Next year, over 300 productions are slated to film in Georgia, around the same as this year. With them, the industry created an additional 59,000 jobs according to some analysis.
“It’s allowed people to stay here in Georgia,” says Randy Davidson, CEO of Georgia Entertainment News. “It’s the jobs that Georgians want, it’s the jobs that we can have here where they can stay here, raise families here and thrive in Georgia.”
The tax credits began at 10% in 2005 and were expanded in 2008 to allow production companies to write off as much as 30%. It’s not an easy process, tax professionals said at the hearing Wednesday. One CPA who conducts tax audits on behalf of the state called Georgia’s process the most stringent of all the states that offer competing programs.
But lawmakers are skeptical of the true impact of the incentive and argue that while the film industry is collecting lucrative incentives, other businesses are left out of the same treatment.
“Any business in Georgia that you pay 30% of their costs, they’re probably going to do well,” said state Senator Chuck Hufstetler, (R) Rome. “[The industry] is vibrant, it’s grown in Georgia, but we have to say, what is fair to everybody? There are other businesses they can grow too.”
The joint tax committee’s hearings are a precursor to a likely showdown this winter when lawmakers have vowed to revisit the state’s film tax credit when the legislative session commences in January.
📽️ Did you know these movies were filmed in Georgia?
There’s no doubt that film and TV have taken a liking to Georgia because of the incentive. A survey of production companies who have filmed in the state conducted by UK-based firm Olsberg SPI showed that 90% of those company’s expenditures in Georgia wouldn’t have happened without the credits.
Industry leaders say now is not the time to reconsider the structure of the incentive. It’s growing like a weed – Athena Studios in Athens opened earlier this year and later in October, Assembly Studios, owned by Atlanta News First parent company Gray Television, will swing open their doors.
They warned lawmakers at Wednesday’s hearing to be cautious of pulling the rug out from underneath budding developments in film and TV.
“I encourage you to reward success,” said Hilton Howell, CEO of Gray Television and Assembly Studios. “Don’t lose what you’ve got, don’t lose what you’ve got. You’re winning.”
“We invested in it years ago and now we’re looking at something where we’re the lead in, we have a well-threaded economy because we have a creative economy which other states are trying to get,” added Davidson. “I would say, let’s continue to grow this responsibly in the state of Georgia.”
Davidson pointed to other states that at one time offered, then did away with the credits like North Carolina or Louisiana. He said productions immediately went elsewhere for the financial benefits and left small towns that relied on the industry high and dry. Flower shops that provided services for sets, lumber yards that provided lumber and antique shops that sold props – were all decimated.
Lawmakers agree that the industry is making money and creating jobs, but is also coming at a cost. Even with a gain of $4 billion in economic activity, Georgia also lost out on over a billion dollars in tax revenue.
“Are they creating jobs? Yes. Are they growing business? Absolutely. But how much does it cost to do that? That’s what we have to look at,” said Sen. Hufstetler. “How can we structure it that’s fair to the businesses here, particularly those that have built studios in Georgia, that doesn’t chase the business away but gets the best bang for our dollars in Georgia. And that’s tough to do, we’re trying to do that.”
Copyright 2023 WANF. All rights reserved.