Film production incentives in the United States

Others argue that the cost of the incentives outweighs the benefits and say that the money goes primarily to out-of-state talent rather than in-state cast and crew members.

Over the next three years Louisiana experienced an increase in film and television productions some of which were nominated for Emmy Awards.

[6] Critics have suggested that the increase in states offering incentives mirrors a race to the bottom or an arms race because states continue to increase the scope of their incentive packages to compete on a national level to not only maximize their individual benefits but also to stay ahead of their competitors.

[6] In 2013, Los Angeles mayor Eric Garcetti appointed former Motion Picture Academy president Tom Sherak as the city's first "film czar" to advocate the state on behalf of the city for more favorable movie production incentives,[7] an office then held by entertainment attorney Ken Ziffren.

Rates run at 20% on certified expenditures, including nonresident compensation, with an added 10% if the production holds end credit/exceptional GA promotional material.

[27] *IA - As of November 24, 2009, Iowa has suspended new registration for incentives pending a criminal investigation into the handling of past film tax credits.

Additionally, independent CPA cost verification is required, and you cannot earn credits with the state after transferring them to another individual or entity.

[1][2][3][4][5] Proponents of production incentives for the film industry argue that it increases job creation, small business and infrastructure development, tourism, and tax revenue generated.

A 1999 study by The Monitor Group estimated that in 1998 $10.3 billion was lost to the US economy due to runaway productions.

[6] Additionally, unless the state in question has a consistent stream of productions, the project-based nature of the film and television industry generates short-term jobs that eventually leave specialized laborers out of work.

However, a focus on improving baseline tax policies to incentivize long-term private investment in industry would lead to higher levels of job creation, productivity and economic development.

[6] Critics propose that unilateral or multilateral moratoriums[34] and federal intervention be used to solve economic inefficiencies created by MPIs.

[6] The Tax Foundation argues that "Requiring films to pass a sensitivity test before being granted a credit subsidizes government-approved opinion with taxpayer dollars" and constitutes "some degree of censorship.

"[6] New Mexico bars films with an R rating from receiving credits unless the Private Equity Investment Advisory Committee, a politically appointed board, deems the film "acceptable";[6] the state committee barred movies deemed culturally insensitive or sexually explicit from receiving tax credits.

[36] Some states have attempted to evaluate the economic impact of their movie production incentives to establish whether the benefits outweigh the costs.

Although this effort was not successful, some point to it as a reason for a decline in film productions in Massachusetts in recent years.

[42] A September 2010 report by the Michigan Senate Fiscal Agency detailed the economics underlying the state's incentive programs.

[44] In fiscal year 2017 New York gave out $621 million in tax breaks for film and TV shoots that take place in the empire state.

[46] Critics of the program say the ubiquity of incentives in most states have diminished Rhode Island's competitive advantage and that the funds would be better spent elsewhere.