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Successful Government Incentives
for Film, TV and Video |
Unleashing Creativity for Area
Economic Growth…
From pundits to populace, everybody seems to agree that Northeast Ohio needs
to step out in a new direction, using the creative arts to drive a new economic
resurgence. So why are we talking about the same old models of massive public
construction, like a convention center, to bring about this new economy? It doesn’t take magic to make movies
or encourage others to make movies here in Northeast Ohio. The following are some successful government
incentives used elsewhere to encourage more film, TV and video, which we could
use successfully here.
While Ohio talks
about encouraging film, television and media productions, most states, other than Ohio, and many
countries already have tax or rebate incentives available to a production
company, which can add up and provides a powerful incentive to produce a film
or television production. It’s long past time for Ohio to do the same.
There’s no magic
to a state encouraging filmmaking. According to the Illinois Film Office, foreign countries moved quickly, offering major tax breaks to lure
filmmakers. Canada’s
incentives can reduce a movie production cost by 20-30%, with a resulting loss
to the US economy of more than $10 billion. Ohio needs to
embrace the same tools other states around the country have used to strengthen
our arts, entertainment and digital media industry, providing carefully
targeted tax assistance to encourage economic growth in new and vibrant ways.
Here are some of the tools other states have embraced, tools Ohio should adopt,
in order to compete:
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Investor Tax Credit:
Louisiana offers a 10-15% tax credit for investors to attract private
investment for the production of films, videos, TV programs or commercials.
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Employment
Tax Credit: Illinois offers a 25% credit for
hiring its residents in a production made in the state (Louisiana offers a
similar 10-20% credit).
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Sales Tax Exclusion: In Louisiana, a production company can exclude sales tax for expenditures
of $250,000 or more from a checking account in a state financial institution on
a production. In some states or countries, a point system
guides the tax reductions permitted, based on production expenses.
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Oregon Production Investment Fund: Authorizes a 10% rebate for productions spending $1 million in the
state.
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New Jersey Loan Program: allows the state to offer loans or loan guarantees of up to $1.5
million to independent filmmakers who shoot most of their projects in New
Jersey.
For state and local governments, improving a production companies’
bottom line, improves the governments’ bottom line. By reducing the cost of production, a state or local government
can encourage the development and expansion of a local film, entertainment and
digital media industry. These incentives work. Since Louisiana enacted
its package, production companies have spent $251 million in the state. When New Mexico began offering filmmaker
incentives, production companies’ spending increased from $8 million to $80
million in the state.
If Ohio wants film, commercial, TV and digital media jobs and
income, Ohio needs to take the legislative steps to compete effectively. These
incentives aren’t offered to generate headlines or star appeal. They are sensible, cost-effective, necessary
tools to compete with other states and countries to generate film production
activity, employment and business growth.
If Ohio really wants to unleash the arts and creative economy, it has to
compete with other states and turn a wish list into action with concrete
development tools.