Georgia Set to Keep 30% Tax Incentives with HB1027

Two weeks following a rather embarrassing mea culpa (see previous post), a numbered House Bill has emerged from the Georgia Legislature addressing Georgia’s Motion Picture & Television Industry and it appears that the Legislature is committed to Georgia’s 30% tax credit for another year. As a local activist explained, “People who work in Georgia’s entertainment industry shouldn’t be surprised by an annual review of our tax incentives.”

House Bill 1027 (authored by Ron Stephens [164th District], Butch Parrish [156th District], Amy Carter [175th District], and Matt Hatchett [143rd District]), is available for your perusal at the Georgia General Assembly’s Legislation website [website][PDF download].

Georgia’s Film Office released this statement today:

“Many of you are already aware that there are potential changes coming to Georgia’s entertainment incentives—both the Sales and Use Tax Exemption as well as the Entertainment Tax Credit program. The link to this legislation, which was introduced earlier this week, is below:

Due to the State Legislature’s need to generate revenue for many programs critical to the economic health of the State, difficult decisions impacting many different industries were made. Initially, the plan in regard to the Georgia Entertainment Industry Investment Act (2008’s HB1100) was to reduce the potential tax credit percentage from a 30% tax credit to a flat 20% tax credit— actually lose the logo uplift entirely—as many legislators were not convinced that the logo was a valuable promotional tool for the State. We felt that this decision would be fatal to Georgia’s film and television industries.

Consequently, the legislation that was introduced was an alternative to dropping to a 20% maximum tax incentive. The major changes to our current legislation are 1) the elimination of credits for interactive entertainment 2)the elimination of the Sales & Use Tax Exemption for purchases or leases of production equipment, and 3) the additional requirement of including a Georgia link in project websites in addition to displaying our web address in the project itself. There is also a new requirement that the Georgia Entertainment Promotion be placed above the below-the-line crew crawl, but there is language allowing for alternative promotional opportunities if this placement is not possible.

There were also changes in this proposed legislation that should be seen as very advantageous for incoming productions. In the current legislation, only Georgia ‘headquartered’ travel or insurance companies are allowed—if adopted, HB1027 allows for an insurance company or travel agency to simply have a Georgia branch to be qualified. Also, the language requiring the Georgia logo to be included in promotional trailers or in each half hour of television broadcasts has been removed. Additionally, some of the changes in the legislation were simply clarifications of language in the earlier statute.

Although it is very disappointing to lose interactive entertainment as qualified productions for tax credits in HB1027, these companies typically do qualify for other incentives, such as job tax credits. Overall, we are very relieved that if HB1027 is passed we have been able to maintain our 30% tax credit so that the Georgia film and television industries can continue its unprecedented growth! We are also hopeful that these changes will afford the film industry some protection from further revisions in any upcoming tax reform agendas.

We very much appreciate your continued partnership in Georgia’s film and television industries.”

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