Important Questions to Ask in Evaluating a Film Tax Incentive Program

Film tax credits do not pay for themselves. While some benefits accrue to in-state filmmakers and suppliers, on the whole they are a net transfer from taxpayers to out-of-state production company beneficiaries. The sheer magnitude of the amounts that various states are spending to lure productions makes it very difficult for any state to gain a lasting competitive edge over the others. Programs have steadily got more generous as states outbid each other, and it is telling that two of the most generous states (Michigan and New Mexico) recently greatly scaled back their programs. Other states continue to debate film tax credits’ merits. At a minimum, film incentive programs should be required disclose credit amounts awarded by recipient, how much was spent per full-time equivalent job was created, and reviewed periodically for their effectiveness by legislative oversight or independent third parties.

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