States Jumping Off Film Bandwagon

Other states are waking up to the fact that film subsidies simply don’t bring in enough jobs and revenues to justify the massive expenditures of taxpayer dollars. According to this article from Businessweek:

Kansas and New Jersey have suspended their tax credits. Rhode Island has capped subsidies at $15 million annually, and Wisconsin’s are set at a measly $500,000 a year. Arizona’s program is set to expire on Dec. 31. Larry Brownell, head of the Association of Film Commissioners International, which represents 41 of the 42 states offering credits, predicts half the states will shelve their programs within a decade.

Given our $400 million deficit, it would seem that it is high time for New Mexico to at least cap its film program.

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4 Replies to “States Jumping Off Film Bandwagon”

  1. Any cap on film rebates would discriminate against local film producers and projects. Several large film rebates would reach the cap quickly and nothing would be available for the small and independent film business community. Do really want to hurt the small business community.

  2. Thought I admit that I don’t know the bottom line in terms of profit or loss of film industry credits, what I do know is one portion of what it brings to New Mexico. Film crew all need places to live. They fill hotels and rental homes. With the rental homes they provide housekeepers, gardeners, rental agents, and homeowners with jobs and income. They have to eat, so purchase groceries or eat in our restaurants, again providing multiple jobs and income for business owners. They rent buildings for their offices. They rent space for their equipment. They hire locals. Schools in NM are providing courses on support for the film industry. Rather than bring their people from LA, NM is beginning to provide quality support crew, providing jobs and income for NM. People with jobs pay taxes, creating a larger tax base. There are a huge number of independent film makers here, as well, able to take advantage of the great support crews NM now offers. Last but not least is the exposure for NM in these films shown around the country and the world…a great advertisement. Can these things be measured? If so, what is the worth? Personally, if film making credits ceased as well as big-dollar Hollywood type movies, it would affect me and many people I know in a negative way.

  3. The central question is why tax the companies that earn the income whether corporations or LLCs. Several countries emerge as the home of business. Hilton Internatonal is a Cyprus Corporation where present tax is 10 percent. It was 4.25 percent before joining the EU. Who wouldn’t jump to set up and run a business there. The annual tax rate is about one-half of the New Mexico gross receipts tax. The film industry draws out of state money to new mexico. When those funds are paid out in goods and services and salaries they theoretically multiply by a factor of 5 times. However, there is leakage so maybe the multiplier is only 4 times. So if the industry brings say $100 million in new revenue to the state, the economic activity is $500 million. Forget the income tax, other states do. Most films are funded by investments. Each movie is a new company. Investment will be offsett by expenses so there is no income to tax. $500 million in total transactions is worth at lease $40 million in gross receipts tax plus perhaps $100 million in personal income tax. Remember Lill Abner who said: “What is good for General Bull Moose is good for the country.” or, “What is good for the film industry is good for New Mexico.” Tread lightly government can drive the industry away.

  4. By all means keep the rebate program. But lose the interest-free loan program because it only benefits Hollywood companies.

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