Measure would require bigger investments to qualify for tax break

Some of the General Assembly’s biggest players are looking to tighten the requirements to obtain Georgia’s film tax credits, among the most lucrative in the country.

Lt. Gov. Burt Jones, House Speaker Jon Burns and the heads of the chambers’ two tax-writing committees — Senate Finance Chair Chuck Hufstetler and House Ways and Means Chair Shaw Blackmon — announced the proposal at a Capitol news conference.

Under the proposal, the state would raise the minimum required investment to be eligible for the credit from $500,000 to $1 million.

The most recent state audit to examine the credit — released in December — said the industry will earn $1.35 billion worth of credits this fiscal year, rising to $1.4 billion by 2029.

The audit said Georgia’s growing film industry creates far fewer jobs than boosters say, and the credit costs taxpayers $59,455 per job.

The film industry counters that it produces about $4.4 billion a year in direct spending in the state and that 92% of the film work done in Georgia depends on receiving those tax breaks.

A key to the proposal is a cap on how much the filmmakers can sell in credits to individuals seeking a break on their taxes. In its first year, the cap would likely be set at a little more than $900 million.

Sales of the credits are a big boost to the bottom lines of the companies that produce film and television projects in Georgia.

For instance, if a film company spends $3.3 million in Georgia and meets all the necessary state criteria, it can earn a 30% tax credit worth $1 million.

Many of those companies, however, aren’t based in Georgia and owe little or nothing in state taxes. So they sell the credit at a slight discount to a person or company that owes state taxes.

The buyer may pay $900,000 for a $1 million credit. The film company gets $900,000, and the buyer saves $100,000 in taxes.