The Minnesota House and Senate have reached a deal to create a new $5 million-a-year tax credit for film and TV production in the state.
The bill language was unveiled on Monday as the Legislature began a special session to pass a budget. The budget package is expected to pass both chambers either later this week or next week, and is expected to be signed by Gov. Tim Walz.
The state has never had a tax credit for production. The entertainment unions, led by SAG-AFTRA, have lobbied lawmakers to create one, arguing that films about Minnesota are currently shot out of state. Several studios also supported the credit.
Advocates for a credit have noted that the “Fargo” TV series was set in Minnesota but shot in Alberta, and later moved to Chicago. They have also argued that “Blood on the Tracks,” a film based on the Bob Dylan album, should be shot in Dylan’s hometown of Hibbing. They warned that it will go to Louisiana if the state does not provide a tax credit.
Lawmakers have repeatedly argued that a film will be made about the death of George Floyd, whose death at the hands of a Minneapolis police officer last year sparked nationwide protests.
“At some point, they’re gonna tell that story, and we want that story to be told here,” said Rep. Dave Lislegard, DFL-Aurora, at a hearing in March. “I guarantee you what — if we don’t create an incentive, and create jobs in an industry, they may come here and they may take a few shots… but they will leave, and they will take that moment — that moment in history that will forever be remembered — they will take it somewhere else.”
At $5 million, the credit is much smaller than supporters had hoped. Several other states provide credits of $50 million or more, and the largest U.S. credits — in Georgia, New York and California — each provide hundreds of millions of dollars annually.
Advocates had pushed for a $25 million program, and the Democratic-led House pared that back to $10 million. The state Senate, controlled by Republicans, did not include a film credit in its budget plan, so $5 million splits the difference between the chambers.
“It’s not a disappointment,” said Melodie Bahan, executive director of MN Film and TV, the nonprofit that serves as the state’s film commission. “I certainly understand that from the legislators’ point of view, we’ve never had this program in the state. They need to make sure it works. Starting it at a low level is going to help us ensure we can make it a success, and provide the kinds of economic benefits and jobs we expect.”
The state previously offered a rebate to incentivize film production, but gave it inconsistent funding, making it uncompetitive with other states’ credit programs. Credits will be allocated on a first-come, first-served basis to qualified applicants, and will cover up to 25% of eligible spending. The program is set to expire in 2025, if it is not renewed.