A tax win for Hollywood in Georgia but battle not over yet
Writer: Mirella Franzese
June 2024 — With tax rebates for major film and television productions breaking past the billion-dollar threshold, Georgia lawmakers introduced House Bill 1180, a much debated legislative proposal to cap growing financial incentives — which died on the senate floor in March and may be reintroduced in the next session beginning in January 2025.
Atlanta’s sprawling film and television industry has lured in $4.1 billion worth of investment from the likes of Disney, Netflix, Apple, Lionsgate and other studio and streaming giants, offering the largest tax credits in all 50 states.
The city of Atlanta is the primary benefactor from this lucrative piece of legislation, ahead of New York, which offers tax incentives reaching up to $700 million. In Georgia, film companies can qualify for tax credits that account for up to 30% of the total production cost if they spend half a million dollars or more in the region, which makes shooting on-location an attractive investment opportunity and allows the state to compete with the larger Los Angeles and New York markets.
However, Republican legislators moved to revise Georgia’s film tax program after a 2023 audit by the Senate Finance Committee projected a return lower than 20% in taxpayer investment.
Another pressure point for legislators was the hiring of out-of-state workers over a local crew majority in the Atlanta film market, which many consider to be an unfair arrangement.
“The film production industry offers livable wage opportunities, but Georgians are not getting their fair share of those jobs yet.” said Nancy Flake Johnson, the CEO of Urban League of Greater Atlanta (ULGA), an organization dedicated to training and educating the African-American workforce, in an interview with Focus: Atlanta.
Even so, the tax incentive creates at least 34,354 jobs every year, with many industry-backed studies estimating a much higher figure for the total number of jobs created, almost double in size. The Georgia Screen Entertainment Coalition (GSEC) also credits over 92% of Georgia’s entire production activity to the film tax credit, which has, in turn, triggered an upsurge in the construction of local soundstages, theaters, and other studio infrastructure.
As a result, tax credits alone are projected to add $5.72 billion to the state’s construction-economy and bring in $2.9 billion in capital investments from 2023 to 2027, according to GSEC estimates.
“One of our noteworthy achievements [in recent years] has been securing film tax credits,” said Hala Moddelmog, president and CEO of The Woodruff Arts Center in Atlanta, in a discussion with Capital Analytics. “(It’s) a crucial component of our strategy (which has) has proven immensely beneficial (to us) as we capture and distribute performances.”
In addition to the tax ceiling, the proposed HB 1180 bill would have limited the total spend allowed in credit transfers, as well as introduced a series of requirements for production companies to qualify for the 30% tax rate. Under the new regulations, filmmakers would have had to hire crews made up of more than half of local residents, shoot scenes in rural Atlanta, and spend over $30 million in the state of Georgia, among other stipulations.
Despite the Senate’s failure to pass the bill into law, many industry experts still speculate that Georgia policymakers will continue to look into opportunities to amend the Film Tax Credit program in the near future, much to Hollywood’s dismay.
“We have to find the right balance,” said Georgia State Representative Long Tran, as cited by WSAV-TV. “We can’t have no cap forever but we are still in our infant stages and it’s growing the industry”
The Georgia Chamber of Commerce also maintained its commitment to support the burgeoning media and entertainment market in Atlanta.
“Our approach involves maximizing the potential of our partnerships and affiliates, such as those dedicated to (…) the film industry,” Chris Clark, president and CEO of the Georgia Chamber of Commerce, told Focus: Atlanta.
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