ATLANTA (AP) — Top Georgia lawmakers say moviemakers must be required to do more than simply show a peach on the finish of the credits to get the highest profit from Georgia’s profitable movie tax credit score.
Thanks largely to tax breaks, productions together with “The Hunger Games,” the Marvel motion pictures, the Fast & Furious installment “Furious 7” and plenty of others shot in Georgia have made the Peach State a hub for motion pictures and tv reveals which may in any other case have been shot in Hollywood in an earlier period. The program has supported hundreds of Georgia jobs and the creation of a number of thriving studios.
In a information convention Wednesday, legislative leaders mentioned they want corporations to meet 4 of 9 targets to obtain the highest 30% credit score on Georgia earnings taxes. House Ways and Means Committee Chairman Shaw Blackmon mentioned that would come with issues comparable to taking pictures in rural Georgia, hiring more Georgia staff and supporting manufacturing studios within the state.
“We’re certainly not limiting the credit at all,” Blackmon, a Bonaire Republican, told reporters after the news conference. “I think what we’re trying to do is provide more value and a better return on investment for the taxpayers and sustain the credits at the same time, so that industry has an opportunity to continue to thrive.”
That’s the largest announcement to come out a monthslong review of all of the tax breaks that Georgia affords to numerous industries. Lawmakers additionally mentioned Wednesday that they want to at the very least quickly droop a gross sales tax exemption on gear supplied to knowledge facilities. So many knowledge facilities are opening or increasing within the state that it is inflicting a notable drain on the facility grid, main Georgia Power Co. to say it shortly wants to construct or contract for new electrical generation capacity.
The bulletins are a comparatively modest consequence of the assessment, which Republican Lt. Gov. Burt Jones touts as a means to shore up tax income in order that Georgia may further cut its income tax rate for all residents and companies.
“The only way to do that is by assessing all the tax credits and incentives that are out there right now, adjust some of them, eliminate others,” Jones mentioned “And that’s what we’re engaged on.”
Jones and others mentioned evaluations would proceed.
There had been speak of capping the variety of film tax credits Georgia would problem in a 12 months — the state is projected to give out $1.35 billion in credits this 12 months alone, and is one in all six states with out a cap. But trade teams lined up at hearings over the summer time to defend the breaks as spurring financial exercise, and House lawmakers have been more probably to defend the tax breaks.
The movie tax credit score has spurred a large improve in motion pictures and TV reveals made in Georgia, however state-sponsored evaluations show the credit score’s price outweighs its financial profit. A research final 12 months by Georgia State University prompt the state noticed a return of much less than 20 cents on the greenback.
Any manufacturing firm can declare credits as soon as they spend $500,000 on movies, tv reveals, commercials or music movies distributed exterior the state. Credits begin at 20% of manufacturing spending, however rise to 30% if a film or tv show shows Georgia’s peach brand. The invoice would elevate this threshold to $1 million.
The credits can solely be used to cut back excellent state earnings taxes owed, and cannot be redeemed for money. However, the credits are transferrable — manufacturing corporations can promote them to any particular person or enterprise with state earnings tax legal responsibility.
In 2022, the state auditor estimated $1.4 billion in such taxes had been excellent. Some lawmakers concern there could possibly be an sudden spike in redemptions, hurting state income. So Blackmon mentioned lawmakers want to restrict redemption of transferred credits to 2.5% of the earlier 12 months’s state income, or about $900 million presently.
House Speaker Jon Burns mentioned the first cause for suspending Georgia’s gross sales tax exemption on gear utilized in knowledge facilities is due to considerations about electrical energy use. Georgia Power testified in regulatory hearings final month that 80% of a forecast leap in electrical energy demand would come from knowledge facilities. The Atlanta Journal-Constitution found at the very least 18 knowledge facilities are being developed or expanded in Georgia.
“These facilities presently are utilizing a disproportionate quantity of our state’s power,” mentioned Burns, a Newington Republican. “We have to make it possible for we stability that and we’ve got assets accessible.”
The knowledge facilities tax credit score is projected to price the state $44 million in foregone gross sales tax income this 12 months, in accordance to a 2022 University of Georgia study. However, that very same research confirmed that knowledge facilities had been an general financial boon to Georgia.
Blackmon mentioned that if lawmakers enable the state to resume giving gross sales tax exemptions, lawmakers want to require the comparatively few staff of such knowledge facilities to make double the state’s common wage, up from 110% now.