Representatives from the film industry urged Georgia lawmakers Tuesday to preserve a tax credit they say has created a boom in movie and television production in the state.
“This is not a tax break. It’s not a tax exemption. It certainly is not a giveaway,” said Brian O’Leary, senior vice president for NBC Universal, which made three movies in Georgia last year. “This is one of the great economic development success stories in the country.”
The Special Council on Tax Reform and Fairness recommended in January the state eliminate tax credits available to the entertainment industry as part of an overall reworking of the state tax code. Movie executives and representatives of affiliated businesses made their case to keep the credit to the House Economic Development and Tourism Committee.
“This will touch many people’s lives,” said Angela Miele, vice president of state tax policy for the Motion Picture Association of America. Caterers, restaurants and other businesses indirectly benefit from the credit, she said.
Georgia State University economist and tax council member David Sjoquist said the Legislature has passed 110 tax exemptions over the years, and they need to be revisited.
“Let’s sunset these and ask the General Assembly to come back and say which of these we should retain,” he said.
The tax council claims the credits complicate the tax code and favor larger firms over smaller ones. Instead, the council said it would be preferable to lower the tax rate for all industries.
The tax council released its recommendations in January. A special joint committee is charged with forging the plan into a bill.
The council plan would eliminate the tax credit for the film industry on June 30. O’Leary said just the suggestion that the credit might end has created “a chill on this industry.”
Warren Nimchuk, a tax consultant for the film industry, told the committee that the industry has spent $1 billion in the state in two and a half years as a result of the program, returning more in taxes to the state than the value of the credits.
If the program is eliminated, projects will relocate to states with more attractive incentives, he said. Or they might leave the country.
“If you choose to end this program, Canada will be very thankful because they will pick up the business,” he said.
Committee Vice Chairman Jimmy Pruett, R-Eastman, said retaining the credit is a “no-brainer" and believes the joint legislative committee will approach it with an open mind.
“This actually brings money to this state,” he said. “Why would you cut that off?”
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