Over the last few years, Georgia has become a popular state for the film industry. Big budget productions that have filmed in the state recently include Stranger Things, The Walking Dead, Captain America: Civil War, The Hunger Games, and Guardians of the Galaxy. Those productions and others have chosen Georgia thanks, at least in great part, to aggressive production incentives.
How does the production incentive work?
The production incentive provides tax credits that apply to films, TV series, commercials, music videos, animation, and game development. To be eligible for a 20% tax credit, companies must spend $500,000 or more on production or post-production within the state on one or more projects. An additional 10% is available to companies that include the promotional logo provided by the state on the finished product. That means companies have up to 30% of the production or post-production costs that can be tax credited in Georgia. That’s quite a large number, and the tax credits translate into real money for those companies. Georgia isn’t the only state who provides an incentive, though. All but 17 states offer some sort of incentive to TV and film productions. However, Georgia is one of the most aggressive, with only Washington D.C, West Virginia, and Oklahoma beating it at 35,% 31%, and 35%, respectively. And, despite the competition, Georgia has the advantage of being in the south (no snow) with access to the largest international airport in the world — Hartsfield–Jackson Atlanta International Airport. This makes it easy for film crews and talent to travel to and from Georgia from all around the world. But what really sets Georgia apart from other film incentives is that there is no cap on expenditures. This means that every last dollar is tax-deductible.
What is a tax credit and why does Georgia provide them to the film industry?
Tax credits reduce an individual’s or a company’s tax liability dollar-for-dollar. Taxpayers can subtract tax credits from the actual amount of taxes they owe the government. This is different from tax deductions and exemptions, which simply reduce the amount of taxable income. The tax credits are also transferable, meaning that the credits can be sold to another taxpayer who owes the state taxes. Tax credits are better than deductions and exemptions because put simply: they save individuals or companies more money.
States choose to give out tax credits to encourage behavior they like and that fuels their state’s economy. Georgia has made it its goal to help filmmakers dramatically cut production costs without sacrificing quality. By encouraging filmmakers to produce films in Georgia, it has also helped to boost the state’s entertainment industry by providing jobs, which ultimately helps the state’s economy.
How do you apply for Georgia tax credits?
All information, applications, and forms for the tax credits can be found on the Georgia Department of Economic Development’s website. If you’re hoping to start your production in Georgia and have questions, then please contact us to discuss.