June 7, 2024

Georgia’s Doing Alright!!

Courtesy of Freepik.com

We’re all excited about the start of summer! However, the summer can oftentimes bring turbulence in the industry and specifically regarding film and television incentives. As we approach June 30th, the end of the legislative year for the vast majority of states, fierce negotiations are currently underway regarding several jurisdictions’ production incentive programs.

The chart below details the current procedural posture for the creation, renewal and/or expansion of several states’ incentive programs:

California	The California Legislative Analyst’s Office (“LAO”), the state legislature’s non-partisan fiscal and policy advisor, issued comments on the 2024-2025 proposed budget urging the legislature to limit the use of all business tax credits, including the state’s film and television credits. In its written comments, the LAO noted that although maintaining Hollywood’s centrality in the film industry may be a worthwhile goal in general, “it is not clear they are core state responsibilities which should be prioritized In the current budget environment.”
Florida	After the recent filming of Bad Boys: Ride of Die, industry insiders continue to lobby the legislature to renew the Sunshine State’s film incentive which sunset in 2015. However, there’s no sign of the legislature reviving the incentive in the future and efforts to start a discussion with the legislature on this matter have failed.
Kansas	The Kansas Film and Digital Media Production Development Act (HB 2097) would create a sales tax exemption and nonrefundable income tax credits for qualifying production activities. However, the bill: was vetoed by Governor Laura Kelley on April 30, 2024, was not brought up for reconsideration by the House, and the veto was sustained.
Missouri	Recently, legislators in Colorado introduced a bill that would slash the FY 2025 incentive by half and slash the entire incentive in FY 2026.
New York	Generative Artificial Intelligence (“AI”) is a huge topic in New York. Two bills have been introduced in this legislative session limiting applicants to the Empire State film production tax credit from using artificial intelligence that would displace any natural person in their productions. As AI was a key strike issue for the WGA and SAG-AFTRA strikes, this issue promises to be thoroughly litigated in the legislature for this year and many others.

Notice anything encouraging though?! Georgia isn’t noted in the aforementioned chart! Earlier this year during its legislative session that ended in March, Georgia lawmakers rejected a bill that would have limited how much the state can spend on production tax incentives, reaffirming the popular production hub’s position as one of California’s biggest rivals.

The original version of the bill would have capped Georgia’s annual allocation for production tax credits at 2.5% of the state budget — or about $900 million. For context, several industry insiders estimate that Georgia is expected to issue upwards of $1.3 billion in film tax credits for the fiscal year ended 6/30/204. An amended version of the bill then purported to issue an exemption to the cap for large productions filmed in newly built studios. This immediately raised concerns about the program favoring big-budget, studio productions over independent films.

All in all, the legislature did not reach a consensus on the bills and these attempts were unsuccessful. Currently, the 20% base credit and the 10% uplift for Georgia promotion remain in place and the Georgia film industry’s doing alright!