Virginia to Offer Tax Credits for Movie Production
May 4, 2010
Virginia will be offering refundable income tax credits for movie production in the state. That is on top of the grants, sales tax exemptions, and lodging exemptions already offered by Virginia to the movie industry. The bill reads:
For taxable years beginning on and after January 1, 2011, any motion picture production company with qualifying expenses of at least $250,000 with respect to a motion picture production filmed in Virginia shall be allowed a refundable credit against the taxes imposed by § 58.1-320 or 58.1-400 in an amount equal to 15 percent of the production company’s qualifying expenses or 20 percent of such expenses if the production is filmed in an economically distressed area of the Commonwealth.
Government should treat businesses equally. And special treatment for movie stars is bad public policy. From our report, “Movie Production Incentives: Blockbuster Support for Lackluster Policy“:
Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars. In return, they attract mostly temporary jobs that are often transplanted from other states. States claim to boost job training with MPIs, but these tax incentives often encourage individuals to gain skills that are only employable as long as politicians enact ever larger subsidies for the film industry. Furthermore, the competition among states transfers a large portion of potential gains to the movie industry, not to local businesses or state coffers. It is unlikely that movie production incentives generate wealth in the long run. Most fail even in the short run.
To see how these tax incentives have spread like wildfire through the states see our graphic.