Georgia’s film industry may take hit with tax cut plan

The state House’s $1 billion tax cut went through a rewrite once the Georgia Senate’s finance people got their hands on it.

The House proposal would do away with an income tax rate that tops out at 5.75%, turning it into a flat tax of 5.25%.

Some of the numbers in the Senate version would seem better, gradually reducing that 5.75% rate to 4.99%, making it potentially an easier pitch to taxpayers.

But for the state’s film industry, it included no Hollywood ending.

The Senate Finance Committee’s adaptation of House Bill 1437 would have capped the amount of money the state spends on its film tax credit at $900 million a year. For the fiscal year that ended June 30, the credits totaled $1.2 billion.

But it’s another part of the proposal, putting an end to the transfer of the tax credits, that could have been a dealbreaker.

About 80% of the credits are sold by film companies that pay little in Georgia taxes. Snatching them up are people or companies that owe state taxes, according to state auditors.

So, for instance, if a film company spends $3,333,333.33 in Georgia and meets all the necessary state criteria, it can earn a 30% tax credit worth $1 million.

But since many companies aren’t based in Georgia, they owe little or no money in state taxes. It’s advantageous for them to sell the credit to a person or company that owes state taxes, most likely at a slight discount. The buyer may pay $800,000 for a $1 million credit. The film company gets $800,000 to make “Dude, Where’s My Car Now?” while the buyer saves $200,000.

Ray Brown, president of the local International Alliance of Theatrical and Stage Employees and Motion Picture Technicians, Artists and Allied Crafts, said the changes “would crush the industry in Georgia as we know it.”

The state’s film tax credit is currently the most lucrative in the nation. Over the past 14 years it has turned Georgia into a huge draw for the industry. At any time, more than 50 film and television productions are underway in the state.

More than 20 studios operate in Georgia, supporting 75,000 jobs, backers say.

The House and Senate have until the session ends Monday night to make a deal, or the tax cut will vanish.

Currently, Georgians seeking to carry a concealed handgun have to apply for a license with their local probate court or sheriff ’s office (depending on the county), get fingerprinted, submit to a background check and pay a fee up to $75. Background checks still would be required when purchasing a handgun from a store or a dealer under HB 1358.

The state permitting process would remain in place to allow Georgians to take advantage of agreements with other states allowing gun owners to carry concealed handguns in states that offer the same permissions.

Opponents said removing the handgun licensing process would make it easier for those who don’t have a legal right to possess and carry handguns to do so — leading to an increase in gun violence.

Gun rights advocates have pushed for years to eliminate the gun licensing process. Their efforts got a boost this year when Gov. Brian Kemp — who is up for reelection — said he supported passing legislation allowing permit-less carry of handguns.

Support within the general public could be a different matter. An Atlanta Journal-Constitution poll in January showed nearly 70% of respondents did not believe adults in Georgia should be allowed to carry concealed handgun in public without first getting a license.

Because SB 319 was amended in the House, it had to go back to the Senate for its consideration.

AJC FILE Changes a Senate panel made to a tax-cut plan could have a big impact on the state’s film tax credit, which has made Georgia a huge draw to the movie and television industries.