Film is Big Business for Georgia
In the last few years, filmmaking has become a hugely important part of Georgia’s economy. Governor Deal announced that in the fiscal year 2015, film generated a $6 billion impact in the state. Georgia has a few advantages that make it a natural place for filmmaking. Our diverse geography allows for shots of skylines, mountains, farms, and beaches. Having the world’s busiest airport means that Atlanta is just one flight away from New York, Los Angeles, and almost every other major city. In fact, there are flights to New York and L.A. about every hour! Cast and crew have an easy time getting to Atlanta and find an impressive array of backdrops when they get here.
Georgia has used its tax code to turn its filmmaking potential into a reality. The state legislature has instituted tax credits that encourage film production in Georgia, and they have proven incredibly successful. According to a local film producer who has decades of experience in the industry, 284 movies and television shows were filmed in Georgia in 2015. Broderick Johnson, the producer of The Blind Side, which was filmed in Georgia, said that the tax break in Georgia is “one of the best, if not the best in the country.” One measure of the success of the tax incentives is job creation. According to Georgia Public Broadcasting, Ant-Man alone employed about 3,500 Georgians. In total, the Georgia Department of Economic Development estimates that the film industry directly employs over 22,000 Georgians and indirectly employs over 77,000 more. It’s clear the tax credit is working as intended. So how exactly do these highly beneficial tax credits actually work?
How the Tax Credits Work
For starters, Georgia’s production incentives can significantly decrease the cost of filmmaking. Productions that spend at least $500,000 in the state are eligible for a 20% tax credit against Georgia taxes. Basically, that $500,000 can be met by the costs of production and post-production that take place within Georgia, travel and insurance provided by Georgia companies, and wages paid for work done in Georgia. Films that include a state logo in their credits qualify for an additional 10% credit, making for a total credit amounting to 30%!
Not all companies that are eligible for the production tax incentive have enough tax liability in Georgia to take full advantage of it. Georgia allows these companies to sell these credits to other taxpayers, so all qualifying productions have the opportunity to monetize the credits to their advantage. Since the credits can be carried forward into future tax years, there should be no shortage of potential buyers. In effect, the ability to sell these incentives increases the production budgets of films made in Georgia. The process of selling tax credits can be complicated. The state recommends that filmmakers go through the State Tax Credit Exchange or other experienced brokers so that the sales are handled appropriately.
Navigating this process can be complicated. For help with the legal issues that arise in filmmaking, including the use of these tax credits, contact The Rhine Law Firm, LLC. We can walk you through the finer points of which costs count toward the $500,000 expenditure minimums and how to be sure you qualify.