The director of Michigan’s film promotion office is stepping down as evidence mounts that the state’s film tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. s are too generous and may stimulate much less economic activity than officials claim. Michigan’s 42% production credit is the highest nationwide, and in the most recent year, the state gave the industry $155 million in tax credits.
A recent Tax Foundation Special Report is a thorough treatment of the subject that concludes the credits are not worth it, and some states are reaching the same conclusion.
Arizona has allowed its temporary film credit to expire, Iowa has suspended all film credits for two years, and New Jersey governor Chris Christie plans to fill part of the state’s budget deficit by scrapping that state’s program. Predictably, Hollywood is producing a series of sob stories about the tragic loss of their taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. preference.Share