When the entertainment industry sought to revive an expired Georgia film and media tax credit earlier this year, the campaign had as many twists and turns as a Hollywood whodunit.
During the recent legislative session, supporters tried unsuccessfully to attach the “postproduction” tax credit to an unrelated hurricane relief bill. They tried again to insert it into a bill that initially sought to make cornbread the official bread of Georgia, but that also failed.
Finally, with the help of a powerful Georgia senator, they succeeded in affixing the tax break to a bill designed to preserve farmland. It passed on the second-to-last day of the legislative session.
That effort revived a benefit for Georgia companies that put the finishing touches on film, television and other media productions. It was the latest episode of a long-running political show that says a lot about the film industry — and the General Assembly.
Film and television production has slowed in Georgia amid industry strikes and mergers and competition from other states and countries. Supporters say the postproduction tax credit is needed to boost an important slice of the film and media business — one that provides year-round jobs that last long after the actors and others involved in filming have left Georgia for other projects.
“These credits are providing jobs in places in this state that wouldn’t be here at all,” said Sen. Matt Brass, R-Newnan, who played a key role in passing the credit. “We’re competing globally for this kind of business, and these are good-paying jobs.”
Critics say such tax credits are giveaways to special interests and have little economic impact beyond the companies that profit from them.
“There’s this myth that there’s some benefit to people outside (film) production,” said J.C. Bradbury, an economist at Kennesaw State University who has studied tax incentives. “That’s not true.”
A 2023 state audit cast doubt on the value of Georgia’s primary film tax credit, and some Georgia legislators have questioned its value. But efforts to curtail that credit have failed.
And if this year’s renewal of the postproduction tax credit is an indication, lawmakers will also go to great lengths to revive film and media credits that were previously allowed to expire.
An industry built on tax credits
Georgia has spent years building a film industry that has made it the Hollywood of the South. More than 10,000 Georgians work in motion picture and video production, and many more work in fields — from accounting to truck drivers — that support the film industry.
The state’s film tax credit, expanded in 2008, played a big role in developing the industry.
Companies that spend at least $500,000 on projects in the state get a 20% tax credit, with an additional 10% if they show the Georgia peach logo at the end of the credits.
Brass sees the fruits of the credit in Senioa, a small town in his district that has been transformed by “The Walking Dead” and other productions filmed there.
“Once the credit came, we saw just a huge boom for that area,” Brass said. “So, I believe, first and foremost, in the film tax credit.”
The film industry says film and television productions accounted for nearly 60,000 direct and indirect jobs in Georgia in 2022, with productions spending $4.4 billion in the state that year.
The 2023 state audit tells a different story. It found the tax credit had created far fewer jobs than advocates said, and that each job created cost taxpayers $59,455.
The industry typically earns more than $1 billion in Georgia tax credits each year. The audit found that if the state spent that money in other ways it would create thousands more jobs.
Bradbury, the KSU economist, said the tax credit distorts the labor market. If people weren’t working in film, he said, they’d be working at other jobs.
“It’s not like Georgia is suffering from high unemployment,” Bradbury said.
As doubts about it grew, some Georgia lawmakers sought to limit the film production credit last year. That effort failed.
But efforts to revive the postproduction credit were just getting started.
Hurricanes and films
Georgia implemented a separate income credit for postproduction work in 2018.
It provided Georgia companies a 20% tax credit if they spent at least $500,000 a year on picture and sound editing, visual effects, animation and other qualified work. It gave an extra 5% credit if the work was done in rural Georgia, plus another 10% if the initial production was done in the state.
Andrew Greenberg, executive director of the Georgia Game Developers Association, said the credit attracted numerous companies that do postproduction work for films, games and other projects.
But the credit expired in 2022. Greenberg said that wasn’t enough time to create a competitive postproduction industry in Georgia.
“In film, we’ve had almost 20 years of (tax) credit to build the robust infrastructure we have,” Greenberg said. “With postproduction, we’ve had five years.”
This year advocates sought to revive and expand the postproduction credit, raising the cap on total credits from $10 million to $60 million a year.
Rep. Scott Hilton, R-Peachtree Corners, introduced the postproduction credit proposal, House Bill 655, late in the session. But it didn’t get a hearing before Crossover Day, when bills must clear the House or the Senate to remain alive.
What followed was a lesson in the strange workings of the General Assembly.
Hilton went looking for another vehicle for the postproduction tax credit.
He picked a bill intended to aid timber producers decimated by Hurricane Helene.
Credit: Georgia General Assembly
Credit: Georgia General Assembly
Senate Bill 52 authorized local governments to forgo timber taxes in the wake of Helene.
But that proposal had already found its way into a larger hurricane relief bill backed by Gov. Brian Kemp. It’s not unusual for the contents of bills to be stripped and replaced with completely unrelated bills, especially late in the legislative session.
So, Hilton proposed turning SB 52 into the postproduction tax credit. He made his pitch at a House subcommittee meeting.
Hilton sought to distinguish the postproduction credit from the controversial film tax credit. He said the postproduction bill would benefit Georgia companies and create Georgia-based jobs.
But Hilton’s proposal didn’t get a vote.
‘Cornbread’ bill hijacked
Supporters of the tax credit found their next shot a week and a half before the Legislature adjourned. This time, the target was a bill that originally would have made cornbread the official state bread.
But House Bill 14 had already been hijacked for other causes. Lawmakers had changed the bill so it now would prohibit Georgia from doing business with companies owned or operated by China and other foreign adversaries. And it would establish an office to promote the music industry in Georgia.
At a Senate committee meeting, Matt Campbell, an entertainment industry lobbyist, asked lawmakers to also add the postproduction credit.
Honnie Korngold, co-founder of South Georgia Studios near Valdosta, told senators that postproduction companies need the credit to compete.
“Some of you have heard the film industry is struggling,” she said. “Right now it’s really in a tragic place. Our soundstages are at their lowest occupancy since COVID.”
Senators expressed support for the postproduction credit. But some were concerned the bill had already become overloaded with different causes. So, the committee stripped the postproduction credit from it.
Once again, advocates went looking for another way to pass the tax credit. They found another unlikely vehicle — and got a big assist from Brass.
Farms and films
Brass is chairman of the powerful Senate Rules Committee, which decides which bills get a vote by the full Senate.
A week before the end of the legislative session, he asked the Senate to withdraw several bills and send them to his committee. Among them was House Bill 129, which expanded a Georgia conservation law designed to preserve farm and timber land.
A few days later, Brass’ committee added the postproduction tax credit to the conservation bill and sent it back to the Senate floor. The final version renewed the credit for five years and kept the cap at $10 million, instead of raising it to $60 million.
“Some of the postproduction industry came to me late in the game and said, ‘Hey, we thought we were getting it into a bill and we’re not. Can you help us?’” Brass said in an interview.
On the second-to-last day of the session, the Senate approved the bill. The House agreed to the Senate version hours later.
The bill won overwhelming support in both chambers. Kemp signed it in May.
Not every legislator thinks the postproduction credit is a good idea. Sen. John Albers, R-Roswell, wants to eliminate the income tax altogether.
“To get there, we need to take a hard look at every tax credit on the books and eliminate those that don’t deliver a positive return on investment for the state,” Albers said.
“HB 129 fails that test,” he said. “We should pursue policies that benefit all Georgians, not just carve-outs that slow down broader tax reform.”
Brass is unmoved by such arguments. He believes film tax credits are a good investment for taxpayers. And he noted the postproduction credit will expire in 2031.
Unless lawmakers revive it again.
“Five years is a lifetime in politics, so who knows,” Brass said. “But we gave the industry five more years to educate legislators and the public to the value they bring to our state.”
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