Leading Georgia lawmakers say that to get the most from Georgia’s lucrative film tax credit, filmmakers should be required to do more than just show a peach at the end of the credits. claims.
Thanks in large part to tax breaks, The Hunger Games, Marvel movies, Fast & Furious 7, and many other productions were filmed in Georgia, making the Peach State more affordable than it otherwise would have been. It is a hub for movies and TV shows. Filmed in Hollywood during the early days. This program has supported thousands of jobs and the establishment of several successful studios in Georgia.
At a press conference Wednesday, legislative leaders said they are requiring businesses to meet four of nine goals to qualify for the top 30 percent of Georgia income tax credits. House Ways and Means Committee Chairman Shaw Blackmon said that includes filming in rural Georgia, hiring Georgia workers and supporting production studios in the state.
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“We certainly don’t limit credit at all,” Blackmon, a Bonaire Republican, said after the news conference. “I think what we’re trying to do is provide more value and a better return on investment for taxpayers, while also preserving the credit so the industry has an opportunity to continue to thrive.”
This is the biggest announcement after a month-long review of all the tax breaks Georgia offers to various industries. Lawmakers also said Wednesday they want to at least temporarily suspend sales tax exemptions for equipment provided to data centers. With so many data centers opening or expanding in the state, there is significant depletion of the power grid, and Georgia Power says it needs to urgently build or contract new generation capacity.
The announcement is a relatively modest result of the review, which Republican Lt. Gov. Bert Jones has touted as a way to increase tax revenue so Georgia can further lower income tax rates for all residents and businesses.
Actor Mark Ruffalo is seen working during the filming of “Avengers: Infinity War” in Atlanta on July 5, 2017. Some Georgia lawmakers said filmmakers should do more than show a peach at the end of the credits to benefit from Georgia’s film tax credit. (AP Photo/Mike Stewart, File)
“The only way to do that is to evaluate all the tax credits and incentives that currently exist, adjust some and eliminate others, and that’s what we’re working on. ” Jones said.
Jones and others said their review would continue.
There was also talk of capping the number of film tax credits Georgia would issue each year. Georgia is expected to issue $1.35 billion in tax credits this year alone and is one of six states without a cap. However, industry groups lined up at public hearings over the summer to argue that tax cuts would stimulate economic activity, and members of Congress were also more likely to defend them.
The film tax credit has spurred a significant increase in movies and television productions produced in Georgia, but a state-sponsored evaluation shows that the cost of the tax credit exceeds the economic benefit. . A study conducted by Georgia State University last year suggested the state earned less than 20 cents on the dollar.
If you spend $500,000 on a movie, TV show, commercial, or music video distributed out of state, any production company can claim a credit. The credit starts at 20% of the production cost, but he goes up to 30% if the Georgia peach logo appears on the film or TV show. This bill would increase this threshold to $1 million.
This credit can only be used to reduce unpaid state income taxes and cannot be redeemed for cash. However, credits are transferable. Production companies can sell credits to individuals or businesses that pay state income taxes.
As of 2022, the state auditor estimated there was $1.4 billion in unpaid such taxes. Some lawmakers are concerned that reimbursements could rise unexpectedly and hurt state revenue. So Blackmon said lawmakers want to limit the redemption of transferred credits to 2.5% of the previous year’s state revenue, currently about $900 million.
House Speaker John Burns said concerns about power usage are the main reason Georgia is ending sales tax exemptions for equipment used in data centers. Georgia Power testified at a regulatory hearing last month that 80% of the expected surge in power demand will come from data centers. At least 18 data centers are being developed or expanded in Georgia, according to the Atlanta Journal-Constitution.
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“These centers are currently consuming a disproportionate amount of our state’s energy,” said Burns, a Republican from Newington. “We need to make sure we have that balance and the resources that are available.”
Data center tax credits are expected to reduce state sales tax revenue by $44 million this year, according to a 2022 University of Georgia study. However, the same study showed that data centers provide an overall economic benefit to Georgia.
Blackmon said that if lawmakers allow the state to reinstate the sales tax exemption, they would double the state’s average wage for a relatively small number of workers in these data centers, from the current 110%. He said he would like to request that.
