The latest version of the bill regarding Georgia’s film and television production tax credit has seen some significant changes as it moves from the House to the Senate. The annual cap on tax credit transfers has been reduced to 2.3% of the state budget, down from the previous 2.5%. This adjustment amounts to around $830 million at current levels. However, despite this seemingly positive change, the Senate Finance Committee has introduced exemptions that essentially render the cap meaningless.
One of the major exemptions introduced in the latest version of the bill is that productions shot at the largest Georgia studios will not be included in the cap. The bill defines ‘big’ as either $100 million in investment from 2023 to 2027 or a footprint of at least 1.5 million square feet of stage space. This exemption means that productions at studio complexes like Trilith and others housing Marvel and major franchises are not affected. Smaller sound stage owners are only exempt if they are located in rural areas outside the Atlanta metro area.
With the revisions made in the bill, hundreds of millions worth of eligible tax credits are now exempt from the cap. This has led some lawmakers to question the effectiveness of the cap, as there appears to be almost no limitation on the tax credits that can be claimed. If the bill does not get on the Monday schedule and does not pass through the legislative process in time, it may not become law. This uncertainty has raised concerns about the future of the film and TV production industry in Georgia.
Georgia has become a major hub for film and television production, attracting some of the biggest Hollywood studios and contributing significantly to the state’s economy. The generous tax credit regime has played a crucial role in positioning Georgia as one of the top three production hubs in the world. While the stricter auditing process has made claiming tax credits more complex, the industry still benefits from substantial financial incentives.
House Bill 1180 was introduced to make the annual tax credit transfers more predictable and manageable. The cap proposed in the bill only applies to tax credits that are transferred or sold, which make up the majority of the credits earned. Hollywood studios and non-Georgia taxpayers often sell these credits at a discount, which fuels a thriving market. Despite its intention to bring stability to the tax credit system, the bill has faced criticism for creating uncertainty and potentially having little to no impact on limiting the overall tax credits claimed.
The revised bill on Georgia’s film and television production tax credit presents both positive and negative implications for the industry. While the reduction in the annual cap on tax credit transfers may initially seem beneficial, the exemptions and loopholes in the bill have raised doubts about its effectiveness. The future of the bill remains uncertain as it navigates through the legislative process, leaving the film and TV production industry in Georgia in a state of limbo.