So, for instance, if a film company spends $3,333,333.33 in Georgia and meets all the necessary state criteria, it can earn a 30% tax credit worth $1 million.
But since many companies aren’t based in Georgia, they owe little or no money in state taxes. It’s advantageous for them to sell the credit to a person or company that owes state taxes, most likely at a slight discount. The buyer may pay $800,000 for a $1 million credit. The film company gets $800,000, while the buyer saves $200,000.
Ray Brown, president of the local International Alliance of Theatrical and Stage Employees and Motion Picture Technicians, Artists and Allied Crafts, said the changes “would crush the industry in Georgia as we know it.”
The state’s film tax credit is currently the most lucrative in the nation. Over the past 14 years it has turned Georgia into a huge draw for the industry. At any time, more than 50 film and television productions are underway in the state.
More than 20 studios operate in Georgia, supporting 75,000 jobs, backers say.
But Danny Kanso, senior tax policy analyst for the left-leaning Georgia Budget and Policy Institute, praised the move to limit the film tax credit.
“Why should Georgia be on the hook for up to 30% of the expenses for film & TV productions?” he wrote on Twitter. “Permanently subsidizing a huge portion of costs for an entire industry is not justifiable. This is made worse by the current lack of caps, disclosures, or basic safeguards.”