Tax incentives give Georgia entertainment industry a boost

Metro Atlantans have spied Bill Murray, Woody Harrelson, Sandra Bullock and Ashton Kutcher trolling local watering holes in recent weeks.

No, this isn’t some strange reality show concoction. It’s a direct result of tax incentives the state of Georgia passed last May for film, TV and digital media production companies.

“Despite the economy, we’re going gangbusters,” said Ric Reitz, a local actor who helped fashion the tax incentive package. The Georgia Film, Music & Digital Entertainment office predicts this will be Georgia’s biggest year ever for entertainment production.

Even though the new incentives didn’t pass until mid-year 2008, the office said it helped boost the economic impact of the movie and TV industry in Georgia over the previous year from $413 million to an estimated $524 million.

This time last year, Georgia had only two major film productions. Now, just over four months into the year, the state already has exceeded last year’s film output. At least a dozen major film and TV productions have wrapped or are currently filming, from a Lifetime TV series (“Drop Dead Diva”) to a horror flick (“H2”) to a historical drama (“Get Low”).

The biggest coup for 2009? Disney will shoot “The Last Song,” starring Miley Cyrus, in Savannah this summer. Because of stronger tax incentives, Georgia beat out North Carolina for the Nicolas Sparks film.

For doing business here, a production company that spends at least $500,000 in a calendar year can get up to 30 percent of its budget in tax credits as long as they display a special Georgia tourism logo prominently in the film credits. A company can sell its unused tax credits to other Georgia taxpayers to help them write down their tax obligations.

The tax incentive also helps Georgians already committed to the state. That includes the Food Network’s Alton Brown and Paula Deen as well as Tyler Perry, who last fall opened a 200,000-square-foot studio in southwest Atlanta. Perry’s studio, which films TBS sitcoms “House of Payne” and “Meet the Browns,” employs 100 to 350 people at any time.

Even before tax incentives, Georgia already had a business-friendly environment, a variety of vistas and an easily accessible airport. As a result, many popular films have been shot here through the years, including “Deliverance” and “Driving Miss Daisy.”

But in the 1990s, Canada began offering financial incentives to attract American film and TV productions. It worked. Hundreds of films were shot up north, and Georgia began losing ground.

Things got worse in 2002 when Louisiana, and later New Mexico, started dangling tax credits and rebates to film companies. That’s how the Oscar-winning drama “No Country For Old Men” landed in New Mexico, not its fictional home in Texas. That’s also why the Louisiana Superdome substituted for the Georgia Dome in a Lifetime biopic about “American Idol” Fantasia Barrino.

Then in 2005, Georgia launched an incentive program of 9 to 17 percent in tax credits, drawing the ABC series “October Road” and the film “We Are Marshall.”

But business dried up again as the incentives race heated up. That prompted Georgia to raise its maximum tax credit to 30 percent last year. While many states offer similar percentages, most have more strings attached (such as giving tax credits only for employing people from that state).

“Georgia makes the process so easy compared to most other states,” said Yolanda T. Cochran, senior vice president of physical production for Los Angeles-based Alcon Entertainment. “They have great crews, great infrastructure, great support.”

In 2006, Alcon shot the film “One Missed Call” in Georgia after the first incentive package but later skipped the state when other states offered better incentives.

Now with a bigger carrot, Alcon has returned to Georgia for Sandra Bullock’s $30 million drama “The Blind Side,” which started production in Atlanta last month. The film is employing 150 to 200 people, mostly Georgians.

“If you show the money,” Alcon said, “people will come.”