Film industry credits are poor subplot in tax policy, states deciding

Several states are backing away from offering tax credits designed to attract film producers, but that isn’t dissuading the state lawmaker who has pushed for it the most in Colorado.

Rep. Tom Massey, R-Poncha Springs, said it’s true numerous states are ending their incentive programs, but that several are doing so because of budgetary constraints or for philosophical reasons. Some lawmakers just don’t like the idea of offering tax credits, he said.

In 1999, only four states — Louisiana, Minnesota, Hawaii and Missouri — offered tax incentives to the film industry for the obvious economic benefits and the free promotion of their states. By 2009, all but six states in the nation were offering them. Colorado began offering limited tax credits in 2006.

But, according to a new report released earlier this month by the Washington, D.C.-based Tax Foundation, numerous states are backing away.

“Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars,” the report says. “States claim to boost jobs with (movie production incentives), but these tax incentives often encourage individuals to gain skills that are only employable as long as politicians enact ever-larger subsidies for the film industry.”

As a result, five states suspended or eliminated their programs in the past two years, and three others completely unfunded them. Nine states might follow suit, the foundation’s study found.

Compared with other states, Colorado doesn’t offer much in tax incentives, Massey said. First, it allocates only about $500,000 in rebates on income and sales taxes, and then only on certain expenditures. Other states are more aggressive, offering millions of dollars in incentives, tax credits, cash rebates and exemptions to lodging taxes, he said.

“Film companies don’t choose to come to states solely on incentives, but they are helpful if they’re looking at competing sites,” Massey said. “A state’s incentives can tip the balance.”

Massey has pushed for increased Colorado incentives for years, including beefing up the Colorado Office of Film, Television and Media to offer limited rebates to production companies that come here and provide other services, such as scouting for production sites.

The office will help production companies make local contacts, obtain necessary permits and find crews to help do everything from build sets to act as extras.


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