Break bumped from 15% up to 25%
North Carolina has bumped its film production tax incentive from 15% up to 25% or a maximum credit of $7.5 million.
Film industry dollars have been ebbing from the state’s coffers over the last few years, with neighboring Tennessee, South Carolina and Georgia offering tax breaks as high as 32%.
On Thursday, however, Gov. Bev Perdue signed into law a bill increasing the incentive — which North Carolina Film Office director Aaron Syrett said will help breathe life back into the state’s struggling economy.
The tax credit covers all expenditures for a production made in the state; it is not limited to credits for below-the-line spending, as is the case for many other filming incentives in other states.
Unemployment has reached 11% in North Carolina, and the increased break could help alleviate that hardship by allowing the state to compete with its neighbors for productions that were once firmly entrenched there.
“In the ’80s, they really built an industry here,” Syrett said. “When the incentives game came along, North Carolina didn’t really get into it until 2006,” which cost the state a lot of its business, he said.
The credit is limited to $7.5 million per production, so a production that incurs more than that amount in tax obligations won’t be eligible for any additional refunds; in addition, a production must spend at least $250,000 in the state to qualify. But, unlike the similar New York incentive, the program does not have a set cap on the dollars it’s allowed to refund, effectively making it a “come one, come all” invitation to as many movies as the state can hold.
That’s a slightly risky proposition: On the one hand, the per-production cutoff might act as a budget limit on incoming productions, pushing larger movies to other states. On the other hand, it might also attract a number of small-to-mid-level films needing a local crew base to support them — the goal of any program like this one.
“Historically, most major pictures have happened in Wilmington,” Syrett said. “But we’ll see the 25% really helping the Ashevilles, the Charlottes and the Piedmont region.”