In 2003, one film company spent $100,000 on a private jet for Richard Gere during the filming of “the Flock”. The problem: New Mexico taxpayers paid for $25,000 of it through their movie 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. program.
Iowa, Michigan and Louisiana have been subject to similar film credit abuses and scandals recently. In 2010, as Michigan struggled with budget woes and harsh economic forecasts, the state’s film 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. credit program provided 1 million to fund Michael Moore’s controversial documentary “Capitalism: A Love Story”. The state pays out as much as $150 million in film tax credits each year.
In Louisiana, Mark Smith, former Director of the Governor’s Office of Film and Television Development, was sentenced to two years in prison for accepting $67,500 from movie producers in exchange of 1.35 billion in film tax credits. Iowa’s former Film Office head Thomas Wheeler was also convicted for being involved in a $1.85 billion dollar film tax credit scandal.
It consequently comes as no surprise that newly-elected New Mexico Governor Susana Martinez (R) has called for cutting New Mexico’s movie production tax credits from 25% to 15%, saving the state $25 million. On the other hand, New Jersey officials are pushing to reinstate their film program after a suspension. North Carolina and Florida have increased their film credit spending.
State officials should consider the corruption that has been associated with film tax credits before renewing or increasing these programs, which essentially waste millions of taxpayers’ dollars funding Hollywood.Share