Film Tax Incentives
6:22 pm
Wed December 18, 2013

How To Scare Away Iron Man? Get Rid Of His Tax Breaks

Iron Man 3. Homeland. Sleepy Hollow.

Iron Man Figure Show in Time Square, Hong Kong
Credit Just_The_Way / Flickr

Those are just a few of the productions that took (or are taking) place in North Carolina. And when you ask an industry expert why producers choose a specific city or state to film in, the answer has very little to do with climate, or airport access, or number of available caterers.

"The only places they look to do business are places that have a [tax] incentive," said Johnny Griffin, director of the Wilmington Regional Film Commission. "That's the number one qualifying factor."

If you don't have a tax incentive "you don't even make it on the list," says NC Film Ofiice director, Aaron Syrett.

The state offers companies wanting to film in North Carolina (be it a movie, TV show or commercial) a 25% tax break for qualified spending, up to $20 million. That means a big production could save up to $5 million.

In 2012, the production companies spent almost $300 million in the state, and received more than $77 million in incentives. Those incentives are scheduled to expire in 2015.

While the general assembly still has time to extend the incentives, and some like Syrett are cautiously optimistic that they will, the fact is that productions often need to plan two or three years in advance. If you have a successful television program, you can spend almost a decade in a state. And production companies like to be able to budget, and count on those tax breaks.

"That certainly is a problem for us, especially when it comes to television," said Griffin.

Syrett, of the Film Office (a division of the state Department of Commerce), says as many as 10 productions decided to look past North Carolina in the past six months because of the uncertainty in the tax structure.

The state's biggest competitors for production contracts are Georgia and Louisiana.

Critics believe the tax incentives are a handout to multi-million dollar companies, and that they don't bring enough sustainable, full-time employment to the state. The NC Film Office estimates there are 4,000 full time jobs in the film and television production industry across the state.

The General Assembly is likely to take up the issue when it returns to session next May.