What is this Film Tax Incentive Anyway?

Everyone readily agrees that the spike in film and television productions in Georgia is directly attributable to the passage of HB1100—the Georgia Entertainment Industry Investment Act (GEIIA)—in 2008. Since the bill’s passage, the economic impact from the industry has jumped from $241 million in fiscal year 2007 to $3.1 billion in fiscal year 2012. But what exactly does the program entail, and who really benefits?

First, the basics: Georgia’s incentive program offers a flat tax credit of 20 percent of a production’s qualified in-state spend (with a minimum spend of $500,000) and the option to achieve another 10 percent for including an imbedded Georgia logo in the show’s credits. Shows can then use this credit to offset any Georgia taxes owed if needed, or they can sell this credit to individuals or corporations who do owe taxes to the state.

It’s a fantastic deal for those with a substantial Georgia tax obligation because they can purchase these credits for less than face value. It’s a circular program: the faster the credits sell the more enthusiastic production companies are about bringing their projects to Georgia. Though the firm tax credits carry forward for five years (i.e. they can be sold up to five years later), the faster a company can monetize (get the credit turned into real money), the better for everyone.

The credit is awarded to the production companies of projects certified by our office—the Georgia Film, Music and Digital Entertainment Office—and is administered by the Georgia Department of Revenue. Eligible productions include feature films, television shows, movies and pilots, commercials, and music videos. Interactive (gaming) projects are also eligible though there is a cap, or limit, to the amount of credits awarded annually to projects of those types. Companies who produce a number of smaller projects like commercials can aggregate them over a 12-month period to achieve the minimum $500,000 spend.

What’s probably most important to note about Georgia’s tax incentive program is that all the ancillary services that serve the production industry (props, cameras, hotel, food, transportation, stages, etc.) and their employees all pay a full complement of Georgia taxes. They are not incentivized or rewarded with a credit of any type. And the more folks that move here to work in the industry and become Georgia residents and taxpayers, the better. These suppliers and support businesses are growing here by leaps and bounds. Production companies can find everything they need here: great crew, costumes, technical equipment, trucks and trailers, caterers, props and much more. The Georgia Film & Television Sourcebook, the go-to reference for finding anything related to production, has swelled to nearly 600 pages for the 2013 edition.

For more information about the program, including the rules and regulations from our department and the DOR and applications, visit our website.