There’s a new civil war being fought over film and TV production as more states pass tax incentive programs for producers.
States from Mississippi to South Carolina to New York have jumped on the incentive bandwagon, with dozens more trying to push their own packages through. Production in Louisiana has quadrupled and in Illinois it has tripled since their respective incentives went into effect.
And it makes a big difference. Newly incentivized Pennsylvania just lured Touchstone’s “Annapolis” away from Maryland, where it’s set. Massachusetts thought it had the perfect location for the remake of “The Longest Yard” — a recently abandoned penitentiary — but the production moved to incentive-rich New Mexico instead. Now Massachusetts is prepping its own incen-tives and hoping to keep projects like an HBO/Playtone biopic of John Adams in the founding father’s home state.
“It’s just general knowledge, incentives are having a major impact on where films are going,” says Jack Gerbes, director of the Maryland Film Office, which is waiting to see if its own incentive package gets approved.
Here is a look at some of the nation’s major incentive programs:
What it offers: Sales tax exemption, 15% expenditure reimbursement ($850,000 minimum)
Tax credits aren’t an option in income-tax-free Florida, and Florida Film Commissioner Susan Albershardt says reimbursements are easier anyway. “You just get a check. You don’t need to sell your credits.”
The pot for the reimbursement comes from Florida’s general revenue and was only fully funded for the first time in 2004, at $2.45 million, allowing the state to entice four productions. Among those are “Transporter 2,” which filmed in Miami; “Lonely Hearts,” starring John Travolta, James Gandolfini and Salma Hayek, which has just began lensing; and the Billboard Latino Music Awards. “It was like seed money, to see how the program worked,” she says.
With the program a success and some additional lobbying on Albsershardt’s part, that amount is nearly double this year, with Gov. Jeb Bush recommending $4.5 million.
“Every state is looking for an incentive that addresses the niche they need to have addressed,” Albsershardt says. “New York’s was targeted at soundstage production. Ours is just about being competitive without giving the money to productions that were going to shoot here anyway.
“Sure, we lose productions to Louisiana,” says Albershardt, citing the loss of “Because of Winn-Dixie,” which moved to Louisiana 11 days before principal photography. “But we also steal from Los Angeles.”
What it offers: 25% tax credit on Illinois wages
“We’ve tripled production,” Brenda Sexton, director of the Illinois Film Office, says happily of the impact the 25% tax credit on Illinois wages has had. “In ’03, we had $25 million in production and last year, which was our first year of the incentives, that number went up to $77 million. 2005 is looking to be very strong as well.”
Illinois has additional legislation in the works that would “expand what we’re offering,” says Sexton. “It would be more of a modification, not a drastic change.” She could not talk about specifics yet.
Because of the tax credit, Harold Ramis, who lives in Chicago, was able to keep “Ice Harvest,” starring Billy Bob Thornton and another Chicago native, John Cusack, in his home state, instead of taking it to Toronto. Chicago also doubled as Gotham for Warner Bros.’ “Batman Begins.” The underground Lower Wacker Drive “was perfect for the Batcave,” Sexton says. “I imagine it will be seen all over the world, and what a great enticement for tourism that will be.”
What it offers: 10% tax credit ($300,000-$999,000), 20% tax credit ($1 million or greater), sales and use tax exemption, employment tax credit, investor tax credit
Many states have been rushing to copy Louisiana’s tax credit incentive model, which went into effect on July 1, 2002. Since then, the state has lured countless productions away from other states, including “Because of Winn-Dixie,” which was originally set to film in Florida.
“There has been a dramatic and enormous growth in the Louisiana film industry solely due to the incentive program,” says Alex Schott, director of the Governor’s Office of Film and TV Development.
Before the incentive program, Louisiana saw roughly $15 million-$20 million in production per year, says Schott. That figure jumped to $200 million in 2003 and to $300 million in 2004. “Our local union has also doubled its roster since the incentives were put into place,” says Schott.
He estimates that with Louisiana’s incentives, a production can save approximately 15% on their budget.
“Not only has film production increased, but small business growth has bloomed and film services companies from around the country have opened offices in Louisiana due to the demand and activity,” he says. “What we are seeing now is the growth of an industry through infrastructure development.”
That growth often comes at the cost of other states’ crewbases, many of which have relocated to Louisiana to get in on the boom in production.
“All the King’s Men,” starring Sean Penn as Willie Stark, a character loosely based on Gov. Huey Long, is filming in Louisiana, and the Matthew McConaughey-Sarah Jessica Parker “Failure to Launch” is in preproduction.
What it offers: 50% tax credit ($1 million cap)
The Missouri Film Tax Credit was instituted in 1999. Originally capped at $1 million annually, with a per-project cap of $500,000, it was upped in 2004 to a $1.5 million overall cap and $1 million per production.
In the past five years, eight productions have earned a tax credit. Jerry Jones of the Missouri Film Commission says, “Without those tax credits, none of those projects would have come to Missouri.”
The increased tax credit has result in a small bump in production. In 2003, three productions spent $19.3 million in the state, and in the last year, four projects have qualified for the tax credit, although only one has completed principal photography.
The first of those productions to be distributed was “Larva,” a Sci Fi channel movie that aired in January.
What it offers: 15% tax rebate, film investment loan program, fee-free state properties
Since New Mexico adopted its incentive program in 2002, it (along with Louisiana) has been the state to follow. “The impact’s been enormous,” says Lisa Strout, director of the New Mexico State Film Office. “We went from $8 million in production in 2002 to $200 million in 2003. And we’ve gone from having a crewbase of 66 to one of 600.”
Now New Mexico has done it again by upping its rebate an additional 5%, with a newly passed bill. Another new bill doubles the amount of the available investment loan (to $15 mil), while another doubles the state’s workforce training fund. The final new bill allows the rebate to be applied to technical aspects of filmmaking such as post-production that were not included in the original bill.
“We’re a rebate, not a credit,” Strout points out. “You don’t have to spend the money in the state. In Louisiana, you have to find a broker for your tax credit.”
Recent prods include “The Missing,” and currently lensing are Ang Lee’s “Brokeback Mountain,” and the miniseries “Into the West,” which shot its first half in Canada and relocated here.
What it offers: 10%-15% tax credit, sales tax exemption
With the introduction of the tax credit a production will be able to recover 10% of its below-the-line budget all across the state. If the bulk of filming is in New York City, then the city kicks in an additional 5%.
“It happened rather quickly,” says Kaufman, director of the New York State Governor’s Office for Motion Picture and Television Development. “It’s very exciting to see how the entire industry came together. The governor was very supportive and so were the Senate and Assembly. We’re very, very busy even during the winter months, which are usually quiet.”
What it offers: 20% tax credit, no state sales tax, free use of state-owned property
“There has been a marked increase in inquiries to the Pennsylvania film office as a result of the new credit,” says Jane Shecter, director of the Pennsylvania Film Office. “Within a day of its being signed into law, Disney moved the feature ‘Annapolis’ from Maryland to Philadelphia.”
Sharon Pinkenson, executive director of the Greater Philadelphia Area Film Office, says, “We saw an instant result with the tax credit.”
“Annapolis,” set at the Naval Academy in Maryland, decided to move to Pennsylvania as soon as the tax credits were passed, despite having spent a month of preproduction in Maryland.
Pennsylvania was able to offer a free soundstage at its navy yard and the perfect stand-in location for the campus of the Naval Academy in Girard College.
“We’re very confident they would see $4 million tax credit for making the move,” says Pinkenson. “I’ve got four projects in development right now, which is more than the last couple of years put together. We’re always busy in the spring, but this is by far the busiest we’ve ever been. Of course, I never really believe anything until the director yells ‘action,’ and even then it’s a little shaky.”
What it offers: $1 million film fund, sales tax exemption, hotel tax cap (30 days)
For the second year in a row, Utah has a film fund to lure production to the state.
Utah’s Motion Picture Incentive Fund was passed at the end of February, signed by the governor in March and will become available on July 1. “While we could get more in the future, the appropriation for this year is $1 million,” says Leigh von der Esch, director of the Utah Film Commission.
“The last $1 million program was highly effective and positively received and we had more applications than we could grant funding for,” says von der Esch. “The use of the demonstration fund last summer resulted in a 74% increase in production. We expect it will be available next year and are already planning to go after more money.”
This year, productions re-ceive an additional 2% for Utah content, and an additional rebate for production expenditures made in rural Utah.
“The World’s Fastest Indian,” about the man who set the land-speed record at Utah’s Bonneville Salt Flats in the 1970s, was made thanks to the fund.
“We feel that project demonstrated the incentives an effective tool for our film industry,” says Utah Film Commission spokewoman Tracie Cayford.
What it offers: 4% pro-duction tax rebate, investment tax credit, royalties tax exemption, pending legislation to up the rebate to 15%
With several projects attracted by the refundable tax credit that went into effect in 2001, Hawaii saw a record level of production expenditures in 2004: $161 million, which was nearly double 2003’s $84 million. “It’s been nothing short of amazing,” says Walea Constantinau, film commissioner of the Honolulu Film Office, of having three skeins filming in Hawaii at once last year –“Lost,” and the now-axed “North Shore” and “Hawaii.”
“From a tourism standpoint, we see these programs as product placement,” says Constinau. “We work with the studios and producers to create a mutually beneficial relationship. We help market the product and they help market us as a destination.”
Mega-hit “Lost” has generated the most tourism interest, with travel shows and newspapers scrambling to provide location info and tours for fans.
The rumor that “Lost” might move back to the mainland was just that, says Constantinau, and the show is happily committed to another year in Hawaii.
Besides its current incentives, Hawaii is trying to pass two new bills, including one that would up the tax rebate to 15% for Oahu and 20% for the surrounding islands. “That would make it easier for one-of productions,” says Hawaii film industry coordinator Mynette Louie.
What it offers: Tax rebate, tax credit, tax exemption since 2004.
Manager of the Mississippi Film Office Ward Emling says since the new incentives went into effect July 1, 2004, “Scouting has gone up and the conversations last longer.”
The first film to take advantage of the incentive was the Johnny Cash biopic “Walk the Line.”
“We just got a letter of application from a commercial company, which is one of the things we specifically thought we could do better with (the incentives in place),” says Emling. This is a long-term development for us. We’re being pretty deliberate about how it works and how we’re going to roll it out.”
Besides the tax incentives, Mississippi is working on beefing up its workforce by building a soundstage near Canton and a technical college for film workers.
“That’s a very crucial element. It’s not just incentives, but pro-duction on location. We’ve got to have the people in place,” says Emling.
What it offers: Sales tax rebate, loan guarantee program (30% or up to $1.5 million)
New Jersey’s loan guarantee program, which was signed into law about 18 months ago, is just getting rolling now that it finally has regulations in place, says Steven Gorelick, associate director of the New Jersey Motion Picture and TV Commission.
To qualify for the program, each film or TV series must spend 70% of its shooting days and 50% of its below-the-line budget in the state.
“We’ve been getting many, many requests, so it’s going to have a tremendous impact,” says Gorelick. “We’re also in discus-sions now to create some kind of tax credit, much like they have in New York. That’s at the talking stage now. We hope to eventually have three incentives; right now we have two. The loan guarantee program is appropriate for lower budgeted movies, say $3 million-$5 million. We’re trying to create the tax credit, which would be appropriate for the studios and networks.”
Several skeins are currently filming in New Jersey, including “Chappelle’s Show,” “Law & Order: Special Victims Unit,” “Rescue Me” and “Third Watch.” Features include Robert De Niro’s “The Good Shepherd.”
What it offers: Hotel tax cap (30 days), sales tax exemption, property tax incentive
John Courtmanche, film division director, calls the three Connecticut incentives “modest,” and adds, “We need to stay competitive, so we’re looking at what other states are doing.”
The reality show “Wickedly Perfect” just shot there for some six weeks, “but that has to do more with this being Martha Stewart’s home state than any incentives,” he says. “It’s too soon to tell what the impact of New York state’s new tax credit will be. If New York City production increases, it could benefit us.”
Courtmanches notes that his state’s production is largely location driven. “We have many New England locations and coastal locations you can’t find in New York state, so even if they shoot 75% there (the minimum needed to qualify for the tax credit), they still need authentic exteriors and they’ll need to come here for those scenes.”
What it offers: Hotel tax cap.
“An incentive proposal has been discussed this year in the legislature but no action has been taken yet,” explains Tom Wheeler, manager of the Iowa Film Office. “In our favor (but not usually considered an incentive) is that we have no permitting and no fees on state property. The Iowa Film Office can also provide much pre-production and production support in an effort to keep costs down.”
What they offer: Sales tax re-fund
Kentucky is still feeling the tourism effects of “Seabiscuit,” and played home to two Ken-tucky-themed films in 2004, Cameron Crowe’s “Eliza-bethtown,” and DreamWorks’ feature about a thoroughbred horse, “Dreamer.” Although Kentucky doesn’t offer any incentives besides a sales tax refund, all that horse-racing know-how is still a major draw.
Kentucky Film Office director M. Todd Cassidy did much of the preliminary scouting to “blaze the trail” for “Elizabethtown,” and for “Dreamer,” he was able to show the production several high-end horse farms that usually wouldn’t give movies the time of day, let alone let them film onsite, and also waived what might be a $10,000-$15,000 per-day location fee. “We just try to provide as much information and support as we can and make the process seamless,” says Cassidy.
“In today’s competitive market, a state would see little if any activity without inducements,” he says of the sales tax refund program. “It has certainly been bene-ficial in sustaining the film industry in Kentucky.” During 2004 reported spending in Kentucky was approximately $8 million.
What it offers: Hotel tax cap (30 days)
“We in the Nevada Film Office would welcome having incentives and rebates,” says the office’s PR manager, Jeanne Corcoran. “We are well aware of what’s going on elsewhere, but have been unable to sway our legislators.” Corcoran says, “The fact that we have had revenues of over $100 million in filming of all kinds each year for the past five years, creates a situation in our legislature of ‘If it’s working, why tinker with it?'”
Something’s working: More than 600 productions filmed in Nevada last year.
What it offers: Exemp-tions on: Sales and use tax; property tax on machinery or equipment; general personal income tax; capital gains tax
“The film office recently moved from the Division of Travel & Tourism to the Dept. of Cultural Resources. With the move came some new initiatives and issues,” says director Van McLeod. “We are still operating on a shoestring, but we are better off in the new budget that is winding its way through the legislature and hope to be fully funded in July.
“We have experienced a high volume of inquiries and in the past five months and have had an increase in production here in too.”
What it offers: 1% cap on sales and use tax; pending legislation on additional incentives including a waiver of occupancy taxes, production rebates of up to 10% and elimination of sales and use tax
“North Carolina’s 1% cap on its sales and use tax went into effect 21 years ago, long before the term ‘incentives’ was bandied-about as it is now,” says film honcho Bill Arnold. “It has been tremendously instrumental in making North Carolina the No. 3 filmmaking state in the U.S. for 19 consecu-tive years, delivering more than $7 billion in direct production spending to the state’s economy since 1980.” Arnold notes that from 2003-2005 the WB series “One Tree Hill” has spent $60 million in N.C.
What it offers: 5% labor-withholding tax rebate, sales and use tax exemption, tax credits
South Carolina Film Commission business development topper Melinda Peterson says, “We’ve seen a tremendous increase in interest from filmmakers since the newly enacted incentives,” which were passed last year. “We’re receiving more scripts and requests for our crew directory than ever before. Any project spending more than $1 million automatically qualifies for all our incen-tives.”
What it offers: Hotel tax cap (after 30 days), Governor’s Motion Picture Opportunity fund (not currently funded)
Mary Nelson, communications manager of the Virginia Film Office, points out that Virginia’s sales and use tax exemption launched in 1995, one of the first in the nation.
In the past, the state has had the Governor’s Motion Picture Opportunity Fund, but due to budget constraints, for the past two years, it has been empty. The Virginia Legislature did recently approve a modest performance-based incentive fund for the state, which was to be used to bring historic-themed productions to the state.
“We are extremely fortunate to have had an exceptional opportunity come to the state recently,” says Nelson, speaking of Terrence Malick’s “The New World,” which stars Colin Farrell in a tale about the founding of the Jamestown settlement in 1607.
What it offers: Sales tax exemption, hotel tax cap (30 days), off-road fuel sales tax refund
“When producers call around for incentives, they’re not typically saying, ‘Well, what about sales tax exemptions?,’ ” says Carol Pirie, assistant director of the Texas Film Commission. “They’re looking for rebates. For states to be competitive, they have to have the bigger incentives.”
She says Texas has been losing production, which is why there are now two bills pending in the Texas legislature designed to create the kind of incentives offered by Louisiana and New Mexico.
“It used to be when a producer called, their first question was about location. Now it’s about incentives. The game has changed completely in the last two years since Louisiana and New Mexico enacted their incentive program. I can tell you almost to the day. I thought, ‘Wow, look what they’re offering! We’re going to take a bath!'” Pirie recalls.
“Friday Night Lights” recently filmed in Texas. The state can boast about its stable of filmmakers in Austin who like to film at home, including director Robert Rodriguez, who shot both “Sin City” and “The Adventures of Shark Boy and Lava Girl” in the capital in the last year, and Mike Judge, who lensed his currently untitled latest on location there. Austin is also home to “School of Rock” director Richard Linklater, who keeps production local when he can, such as with “Waking Life.”
If passed, the bill would intro-duce a $30 million incentive fund. “The governor believes Texas needs to be competitive,” says spokesman Rick Perry. “The fund could be used for just about anything, with stipulations like number of jobs and duration to be hammered out.” But the fund wouldn’t be used like a rebate. “It would be cash on the barrel head,” says Black. The bill is modeled on the highly successful $295 million Texas Enterprise Fund.
What it offers: Hotel tax cap (28 days)
While South Dakota does not have tax incentives for filmmakers, the state can boast low sales tax (4%) and no corporate or personal income tax. Although there are currently no plans for a tax incentive program, Ann Garry of the South Dakota Film Office says, “With so many states doing this, I hope South Dakota isn’t far behind. I think the incentive programs definitely lure filmmakers to the area.”
The biggest tourist draw is for a production that’s actually filmed in California. “HBO’s ‘Deadwood’ has had a huge impact on tourism in the actual city of Deadwood, South Dakota,” says Garry. “Peo-ple have become very interested in the actual town for its history, character, and gambling opportu-nities.”
What it offers: 6.5% sales tax exemption on equipment and services, tax exemption on production vehicles, hotel tax cap (30 days)
Production in Washington state has been down 70% since 1994, although those “Sleepless in Seattle” night shirts are still big sellers at SeaTac Airport.
“With globalization and Vancouver three hours to our north, production has fallen off,” says Suzy Kellett, director of the Washington State Film Office. “We do bits and pieces of features — such as ‘The Ring 2’ — but more projects for television and cable and commercials.”
What it offers: Arizona has two bills pending in legislature, one that would offer a 20% tax credit for a $100,000 minimum expenditure and one that would let productions elect either an income tax credit or an exemption from transaction privilege tax and use tax.
“Without legislated incentives, the city of Tucson has gotten creative,” says Shellie Hall, director of the Tucson Film Of-fice. “We lent Jamie Redford city-owned office space for his directorial debut, ‘Spin.’ ” Then the city worked out a deal with ABC/Disney to use an exhibition hall at the Tucson Convention Center as a soundstage for two months for the Stephen King miniseries “Desperation.”
“Disney was pushing them to go to Canada, but we kept the entire production in southern Arizona,” says Hall. “They were here for almost three months instead of the three weeks they had originally planned and they brought $6 million to the local economy.”
What it offers: Pending legislation to replace the 1997 incentive sales tax refund.
Mitch Chandler, spokesman for the Arkansas Dept. of Economic Development, calls the pending incentive “very aggressive.” The proposed bill would lower the current investment minimum from $500,000 to $250,000 in the first six months and refund 10%. “If the same group brings back a film within 24 months, they will get back 15%, providing the second film exceeds
$1 million. For a third production, the rebate is 20% if they spend $1.5 million within 12 months. It’s stepped. It’s designed to bring people back.”
Currently, Arkansas averages 10-15 projects a year.
“We want to become more competitive,” says Chandler.
What it offers: Free or low permit fees, hotel tax exemption, sales and use tax exemption, 5% sales tax exemption on purchase of production equipment, pending tax credit legislation, pending City of Los Angeles incentives.
Gov. Schwarzenegger is pushing new legislation that would mirror New York’s tax credit, where productions must spend 75% of their shoot in state to qualify. The exact percentage of the credit has not been announced for the bill, which will be submit-ted along with the rest of the new state budget in May. If enacted, it would be effective as soon as this year’s budget passes, presumably on July 1, with rebates being handed out starting Jan. 1, 2006.
Los Angeles mayor James Hahn announced an incentive program for the city March 17. Program would reimburse productions that shoot more than 75% in the city as much as $625,000 for 5% of below-the-line costs up to $12.5 million. Proposal must gain approval of the city council.
Amy Lemisch, director of the California Film Commission, says, “We need to do something that will sustain the jobs here for the long term. We want to retain and increase production.”
What it offers: Pending legislation would provide a 10% labor tax credit for productions with budgets from $300,000 to $1 million. The credit would go up to 20% for employing Colorado residents.
“There’s a bill in the hopper right now,” says Brian Vogt, director of the Colorado Office of Economic Development and International Trade.
“We’re about to give rebirth to our film commission as a private nonentity. We’re announcing our new film commissioner and the direction we’re heading. It’ll be incubated in a thing called the Advance Colorado Center.”
What it offers: Pending 9% tax credit legislation
Georgia’s pending legislation would not only create a 9% tax credit, but add 3% for employment of local residents and add an additional 2% if the project is a series, with a minimum $500,000 spent in the state.
“A lot of our projects have ended up in South Carolina and Louisiana,” says Lee Thomas, locations liaison for the Georgia Film, Video & Music Office. ” ‘Ray’ was set up here, but they left. At least five other shows we’ve scouted ended up over there. Sales tax exemption alone can’t compete with the tax credit Louisiana is offering.”
With Georgia on the verge of getting their own tax credit, Thomas expects things to change. “We’ve had a lot of interest, a lot of calls. Several people are watching and if it goes through, we expect it to get really busy after this.”
Although business has been slow, averaging maybe two to three productions a year, Thomas is excited for HBO’s “Warm Springs,” about President Franklin Roosevelt’s convalescence at the titular location. It stars Kenneth Branagh and Cynthia Nixon as the Roosevelts. “We’ll be watching tourism to the area. I believe their budget was near $15 million. I expect it will help out the area of Warm Springs a lot. The town where ‘Fried Green Tomatoes’ (was filmed) is still a thriving tourist business, all these years later,” says Thomas.
What it offers: Hotel tax cap (28 days).
Kansas is another state modeling its incentive package on Lou-isiana’s.
There are two bills working their way through the state’s legislature: one offers a 15% tax rebate and the other offers an investor tax credit.
“The investor tax credit is similar to Louisiana’s, at least in spirit,” says Peter S. Jasso, Kansas Film Commission manager. “If the bills pass, I think they probably will have a pretty good impact and draw some higher-budgeted films. Right now we get a lot of TV, a lot of documentary, a lot of inde-pendent film, usually with budgets of $1 million or below.”
What it offers: 5% sales tax exemption, pending 50% wage rebate legislation.
Maryland has legislation in the general assembly for a wage rebate of 50% up to the first $25,000 per employee, with a $2 million cap per project, for salaries under $1 million.
“We’ll know by early April where it stands,” says Jack Gerbes, director of the Maryland Film office. “It will have a tremendous impact. Right now I have three films whose producers I’ve worked with before all wanting to come back and it will be determined whether we get incentivized. If we don’t, well lose them in all likelihood.” Maryland offers a 5% sales tax exemption, which Gerbes calls “a nice, small something to give to a production company. It saves a little money. We got it five years ago when sales tax exemption was the thing to do and Canada had all the incentives. In the scheme of things, the 5% will save a few bucks, but it’s not a huge savings.”
What it offers: Sales tax exemption, fuel and electricity sales tax exemption, hotel tax cap (28 days).
Maine’s proposed incentive bill, the first of its kind in the state, would offer labor-tax rebates to production companies.
Greg Gadberry, assistant director of the Maine Film Office says, “Finances are tight in Maine, as they are in many states. But we are hoping that this incentive bill will pass,” says Gadberry. “Our incentive programs have grown over the past 10 years and are a very important component in our marketing effort.”
Indeed, Maine must compete against its neighbors, including Quebec and Ontario, which have some of the most lucrative tax incentives in North America.
Gadberry says “All producers are aware of how many incentive programs now exist. And they are not shy about asking for good deals.”
Recent features include “12 Dogs of Christmas” and, improbably enough, “Straight Out of Compton 2.”
What it offers: Fee-free locations, pending legislation.
Massachusetts Sen. Brian Lees has been trying to get an incentive package passed since the late 1990s, says Robin Dawson, director of the Massachusetts Film Bureau. Now Massachusetts is back with a new bill. “I’m hopeful,” says Dawson. “We’ve been able to educate a lot of legislators on the benefits of tax incentive programs implemented throughout U.S.
“I think (Mississippi Film Of-fice manager) Ward Emling came up with the best way to explain this to the legislature, for whom the phrase ‘tax break’ or ‘tax incentive’ is a red flag: ‘You receive $1 before we give them back 20¢ of the dollar coming in you weren’t going to have.”
Dawson says that Massachusetts is especially challenged in keeping productions because “Out of all the 50 states, I’d say we’re duplicated most effectively in Toronto and coastal areas in Vancouver. Pittsburgh and Philadelphia can duplicate some of our looks. Our numbers have dropped significantly in the last year and it’s just essential we get this in place.”
What it offers: Pending legislation for 10%-15% production rebate, sales tax exemption.
Having a former entertainer in the governor’s mansion didn’t help Minnesota’s film community; former Gov. Ventura eliminated the state’s previous 10% tax rebate. “We went from seven productions a year to one,” says Craig Rice, the former executive director of the Minnesota Film & TV Board.
The new governor, however, is a believer after seeing the film board’s numbers, says Rice, and is now interested in reinstating the incentives and expanding them.
What it offers: No sales tax, hotel tax cap (30 days), vehicle licensing exemptions, migratory equipment tax exemption, pending legislation
If Montana’s current bill passes, which would allow for a 15% labor tax rebate and 10% rebate on production expenses, Sten Iversen, manager of the Montana Film Office, estimates that his state could be in the top five production centers, just behind New Mexico and Louisiana.
“Without it, I’d say we’re probably ranked 20th,” he says, adding that three “significant” features are waiting on the outcome of the bill.
Iversen is optimistic about the bill passing. “The governor is very interested in promoting Montana filming, so he’s put the weight of the administration behind it.”
Plenty of features still come to Montana, including Wim Wenders’ latest “Don’t Come Knocking.”
What it offers: Hotel tax cap (30 days); pending legislation on an investor tax credit, a wage rebate and a sales tax waiver
Ohio’s state film office was de-commissioned two years ago, boosting the importance of the Cleveland and Cincinnati film offices.
“Louisiana’s success is affecting us more than anyone than else,” says Chris Carmody, presi-dent of the Greater Cleveland Film Commission. “Some of our folks are going to work down there. It’s been a small exodus.”
With the new proposed incen-tives, Carmody hopes Ohio can become competitive again.
Cleveland is in Cuyahoga County, which offers a 50% rebate in county sales tax. The city of Cleveland is pursuing a similar program to rebate its 2% payroll tax and a 50% payroll tax rebate to businesses that offer new jobs. For the past several years, the Cleveland Film Commission has footed the bill for airfare, ground trans-port and hotel stay for producers scouting the area, helped by sponsors Continental Airlines and Ritz-Carlton.
“The OH in Ohio,” starring Danny DeVito and Parker Posey, recently wrapped in Cleveland. “They opened the city to us,” says producer Amy Salko Robertson. “We shot at Jacobs Field. We got incredible production value that would be hard to get for a low-budget (under $5 million) independent movie. All the locations made the film look great. The crews were fantastic.”
What it offers: 15% tax rebate ($1 million minimum expenditure) or sales tax refund (not currently funded)
Oklahoma already has incentives on the books, but the rebate fund has been empty for the last two years. There is a bill before the Legislature to fund it on a fiscal basis, starting with $2 million a year, says Jill Simpson, director of the Oklahoma Film and Music Office. “If we bring in a couple of big-budget films this year, then we can go back to the well for more money.”
Productions will have their choice of either receiving the tax rebate or a city and state sales tax refund.
Another proposed bill would give film and music companies a 25% tax break if they reinvest in similar projects within the state. “If these pass, we’ll be in a good place,” says Simpson. “It’s all about getting films to come to the state.”
Without a working rebate, Oklahoma is trying to offer what Simpsons calls “concierge services,” which would reduce permit fees, waive hotel room tax and secure free office space.
What it offers: 10% rebate (max $250,000 per feature or $30,000 per TV episode) for features that spend at least $1 million in state (not currently funded)
Oregon may have the highest-profile film board member in acclaimed indie director Gus Van Sant. But the state finds itself in the same boat as Oklahoma, with an incentive that isn’t fully funded. “I’m happy to help if I can attract whatever you need me to attract,” Van Sant said at the time of his appointment to the board. “I can’t personally give tax breaks, but I can tell people about my experiences.”
Veronica Rinard, executive director of the Oregon Film and Video Office, says they are in the process of pre-selling tax credits to raise money for the fund. “We cannot take any applications from productions until we have sufficient monies in the fund to pay the rebates.” The state also has pending legislation to create a 5.5% or 6% labor rebate.
Still, Oregon remains competi-tive. “Several shows have done budgets for Oregon vs. Canada and other locations, and producers have been surprised to find that Oregon has been $100,000-$250,000 less expensive than anticipated on shows with budgets in the $2 million to $3 million range,” says Rinard.
Oregon’s bread and butter is independent features, which generated $10 million-$20 million in out-of-state spending. “Our indigenous industry has generated about $160 million in revenues per year, and the television and cable broadcasting segment generates an additional $255 million per year,” says Rinard.
What it offers: sales and use tax refund, hotel tax cap (30 days), no state income tax, freight waiver, free locations
“It helps us be competitive,” Jan Austin, deputy director of the Tennessee Film, Entertainment and Music Commission, says of the incentives the state offers.
The state has bills pending that would modestly add to those already offered. “The legislation is in its very early stages. It’s difficult to talk about something that’s not well-grounded at this point,” says Austin.
Only one or two films filed for the refunds last year, Austin recalls, but production was up.
Perhaps the biggest selling point of Tennessee is its strong music scene. “We have many filmmakers looking to marry original scores with music of the state,” says Austin.
Sundance hit “Hustle and Flow,” which was sold for a record amount at the festival and won the audience award, was filmed in Memphis, as was Sundance jury award winner “40 Shades of Blue.”
What it offers: No tax incentives at this time, pending legislation
Rhode Island has a proposed incentive package that includes a 20% labor tax credit, a sales and use tax exemption, hotel tax exemption and an investment credit of 25%. It also would have a three-year rollover for any local investors in films shot primarily within the state.
Steven Feinberg, director of the Rhode Island Film Office, says, “We have the most diverse loca-tions all in close proximity. We’re the smallest state with the biggest back lot. We have urban sprawl which is 10 minutes away from farmland, or colonial homes, and then we have beachfront property, and we have these historic mansions that were built by the Vanderbilts. Production moves don’t cost anything. Our rush-hour traffic lasts eight minutes,” he laughs.
“We have the crew base. Now what we’re doing with this legislation is leveling the playing field to make Rhode Island the place to come on the East Coast,” says Feinberg.
What it offers: Hotel tax cap (31 days), sales and use tax exemption
This year, Vermont initiated a film assistance program that guarantees loans for eligible film projects up to $1.5 million and a labor rebate bill is now before the Legislature. “I think it will go through. We have broad support,” predicts Danis Regal, executive director of the Vermont Film Commission.
Vermont also offers a unique perk: Nonresident performers can opt to pay state tax there or in their home state, whichever is less.
“Vermont will be competitive once we get some additional incentives in place,” says Regal. “I think that a lot of productions run to Louisiana and New Mexico, but it doesn’t work well for everybody because the procedure is so involved. We’re a small state and we have a very nimble government. The governor’s phone number is in the book! We have strong state support and the ability to do things overnight, on a state or town or city basis. You can do a small film here for the same price here as going to Canada.”
No tax incentives at this time:
“We have been working on the issue this legislative session,” says Peg Owens of the Idaho Film Bureau. “One bill is being drafted but probably won’t get to a vote this year. Also, we are forming a task force made up of legislators and industry representatives to study the possibilities this spring and summer for potential bills for next session. Other than the state office, Idaho has not had any other film commissions. Boise, however, is in the process of developing the state’s first city film commission.”
“We are definitely impacted by not having incentives,” says Sarah Klavas, director of marketing for the Wisconsin Department of Tourism. “There are plenty of them out there and the film indus-try looks for that.”
Despite the lack of incentives, Wisconsin still manages to attract its share of big productions in-cluding “Mr. 3000,” which filmed at Miller Park, where the Milwaukee Brewers play their home games, and brought in roughly $7 million to the area. The remake of “Amityville Horror” used a location in southeastern Wisconsin. “Although the home base was in Chicago area, the house they used was in Wisconsin. We had the look that they wanted.” Klavas says that the “bread and butter” productions for Wisconsin are low-budget independents and commercials