US States Moving Away from Film and TV Tax Credit Incentives?

According to Tom Moroney writing at Bloomberg Businessweek (hat tip: Entertainment Law Reporter), the climate in the United States for lucrative film and television incentive programs may be shriveling: Strapped States to Hollywood: Stay Home.

[Detroit 1-8-7]’s producers were lured [to Michigan] by state incentives—a mix of tax credits, job-training subsidies, low-interest loans, and other aid. A state report says such subsidies are the most generous in the U.S., and cost Michigan taxpayers more than the economic activity they generate. The 355 full-time jobs created as a result of the program last year cost the state about $193,000 each, the study found. Rick Snyder, the Republican governor-elect, wants to curb the largesse.

Since 2005 states have granted $3.5 billion in incentives to makers of films, TV shows, and commercials, according to a Tax Foundation calculation for Bloomberg Businessweek. Now, as states face a total of $72 billion in budget deficits in their coming fiscal years, according to the National Conference of State Legislatures, some are concluding Hollywood gets a lot more than it gives.

The Tax Foundation has put up its own post (States Slashing Film Tax Subsidies) which provides further details, and includes a link to the Tax Foundation’s own lengthy report on the topic.  For contrary perspectives on the value of tax credits, see this earlier Signal post: A US Perspective on Tax Credits.

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Bob Tarantino

About Bob Tarantino

Bob Tarantino is Counsel at Dentons Canada LLP and focuses his practice on the interface between the entertainment industries and intellectual property law, with an emphasis on film and television production, financing, licensing, distribution, and IP acquisition and protection. His clients range from artists and independent producers to Canadian distributors and foreign studios and financiers at every stage of the creative process, from development to delivery and exploitation.

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