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Whistleblower sparks investigation into Georgia film tax credits

(My contact info: jbrett@ajc.com)

A published report citing a mountain of documents and inside sources alleges that Warner Bros. improperly claimed Georgia tax credits on equipment, worth more than $600,000, associated with the movie "Sully." The studio giant says all necessary documentation was submitted and approved by the state two years ago, that they’ve had no subsequent inquiries and look forward to future work in Georgia.

The 2016 film, directed by Clint Eastwood and starring Tom Hanks as heroic pilot Chesley "Sully" Sullenberger, did indeed film here. Eastwood and Hanks delighted locals by popping into a downtown Atlanta bar after production wrapped one day.

Claims detailed in a Wednesday report by the respected industry publication Variety regard equipment that an unnamed informant, who provided the publication with documents including invoices and contracts, said was not actually in Georgia and therefore not eligible for tax credit.

The Georgia State Attorney's office told the Atlanta Journal-Constitution that the matter was referred to the Department of Revenue, which wouldn't comment. Neither would the Georgia Department of Economic Development, the state agency of which the Georgia Film, Music & Digital Entertainment Office is part.

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Warner Bros.' complete statement reads, "When production was completed on “Sully,” we submitted necessary documentation for our tax incentive application.  It was received on March 16, 2016, reviewed and approved by the Georgia Department of Revenue on  May 31, 2016.  We have had no subsequent  inquiries regarding this matter.  The State of Georgia has been a great partner with us on numerous film and television productions, and we look forward to continuing to work with them."

MORE: How much did "Avengers: Infinity War" spend in Georgia?

The amount in question represents a small fraction of the movie's overall financials. "Sully" had an estimated budget of $60 million, and its global box office haul exceeded $238 million, according to data from Box Office Mojo.

Complying with the film tax credit system is a straightforward process, said actor and SAG-AFTRA Atlanta local president Ric Reitz.

"You must qualify your expenses, whether they are labor or otherwise, through a pretty rigid system. We want to run the cleanest tax credit system in the country," said Reitz, who also works as a tax-credit broker but was not involved with "Sully." "I’m not familiar with the case. I’m not going to judge Warner Bros."

Tax policies offering up to a 30 percent tax credit to filmmakers, have led to Georgia's booming film industry - something state officials love to tout.

“I am excited by the success of this industry,” House Speaker David Ralston said at the 2017 Georgia Film Day, an annual event held during the legislative session. “As long as I sit in that office, there will be no bigger fan of that tax credit and this industry than I am.”

An industry study at the time named Georgia the world's top filming location for big-budget domestic films. At this year's Film Day event, the crowd that packed the Capitol rotunda area enjoyed a video highlighting everyday Georgians who work in the industry, and cheered a robust economic report – 320 feature films, television movies and series, commercials and music videos were shot in Georgia in 2017 and projects during fiscal year 2017 generated an economic impact of more than $9.5 billion, according to the Georgia Department of Economic Development.

“No other film production center has seen more growth in infrastructure than Georgia has over the last eight years,” said Georgia Department of Economic Development Commissioner Pat Wilson. “Gov. (Nathan) Deal’s leadership and unwavering support has ensured Georgia’s place as a top destination for film and television activity.”

About the Author

Jennifer Brett is a multiplatform journalist and digital coach. She writes The Buzz blog for accessAtlanta.com.

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