Georgia Lawmakers to Review States $1.3 Billion Film Credit

Georgia lawmakers will take a close look at all of the state’s tax incentives — including its TV and film production program — with an eye toward reforming the ones that don’t work.

Gov. Brian Kemp joined Lt. Gov. Burt Jones and House Speaker Jon Burns on Thursday to announce that a “thorough review” of tax credits will take place after the current legislative session. The announcement specifically included the $1.3 billion film credit, the state’s largest tax incentive, which has traditionally enjoyed bipartisan support.

Jones, who was elected in November, campaigned eliminating the state income tax, which would require either eliminating tax credits entirely or turning them into cash grants. Other lawmakers have also sought to reduce income taxes for all taxpayers by eliminating business tax credits.

“For over a decade we’ve been giving out billions of dollars of tax credits and tax incentives to these large corporations,” Jones told the Jackson Progress-Argus in 2021. “And while some of them have been all right, most of them have not been worth the paper they are written on.”

Georgia’s film incentive is by far the largest in the country. Most other states cap their incentives, but Georgia’s is unlimited, meaning that all productions are eligible for a 30% discount on their costs.

New York Gov. Kathy Hochul recently proposed increasing her state’s tax credit from $420 million to $700 million per year. In California, the credit is capped at $330 million per year.

In Georgia, business groups are already mobilizing to defend their incentives. The Georgia Screen Entertainment Coalition formed in recent months to make the case that the film tax credit generates over $4 billion in production spending each year.

“GSEC will work to continue the momentum and return on investment for our state, supporting a stable tax policy that is vital to ensure the film industry has a predictable and competitive business climate in which it can thrive,” the group’s executive director, Kelsey Moore, said in a statement in January.

The group includes all the major production facilities in the state, as well as the IATSE Local 479 and the Georgia Chamber of Commerce.

The industry has successfully fought prior efforts to rein in the credit. Last year, State Sen. Chuck Hufstetler proposed capping the program at $900 million per year. That proposal was quickly dropped in the face of stiff opposition from the state House of Representatives.

Georgia also has a job tax credit, which cost $191 million last year, according to a state tax expenditure report. A recent state audit questioned the effectiveness of that program, finding that it generates much less economic activity than it costs.

The state auditor’s office has also claimed that the impact of the film credit has been overstated.

The state also provides tax credits for low-income housing ($294 million in 2022), research and development ($194 million), manufacturing ($85 million) and data centers ($12 million).

The tax expenditure report estimates that the film credit cost the state $894 million in 2022, based on Department of Revenue data. The Department of Economic Development has said that $1.3 billion in film credits were certified in 2022, though it takes time for credits to be claimed.

Jones served as a state senator for a decade, and joined a slate of fake electors as part of a bid to help President Trump overturn the election outcome in the state.

He has been critical of tax credits for years, but in 2015 he said the film credit had served the state well in growing the movie industry, according to the Macon Telegraph.

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