Bean counters give Georgia’s film tax credit a mixed review

1 min read

The Georgia Department of Economic Development is doing a better job documenting the economic impact of the state’s film tax credit, according to a follow-up review.

But the General Assembly has not acted to cap the credit to control its growth, as a 2020 audit had recommended.


Georgia has become a filmmaking center since lawmakers enacted the tax credit. The number of film production jobs in the Peach State rose from 10,900 in 2016 to 16,500 in 2019, an increase of 51%, according to a state Department of Audits & Accounts review released Monday.

 The tax credit has more than doubled since 2013, reaching $961 million in tax year 2019. It’s the state’s largest income tax credit and the largest film incentive in the country.

While state policymakers cheered the jobs and economic impact the film tax credit was generating, the 2020 audit suggested a need for additional information to properly assess the costs and benefits of the credit both for decisionmakers and the general public.

The General Assembly passed legislation last year that provides for economic analyses of tax benefits, including credits, deductions, and exemptions. The bill also tightened rules governing how film companies transfer or sell unused tax credits to other businesses, a common practice for production groups that conduct part of their movie-making work outside Georgia.

Efforts were made this year to cap the credit. But a cap of $900 million per year the state Senate Finance Committee approved fell by the wayside before final passage of a broader tax cut bill.

Since the 2020 audit, the Department of Economic Development has focused on direct spending by production companies rather reporting on the tax credit’s total economic impact, the review noted.

The state agency also no longer includes industry-wide job totals in its annual press releases on film production spending. However, it has still attributed wages that are unrelated to credit spending, the review found.  

Film tax credit provisions also have not been changed to reduce economic benefits flowing to other states.

The 2020 audit noted that most states incentivize hiring residents over nonresidents, but Georgia does not. As such, nonresidents and out-of-state vendors can provide services within the state, and the expenditures qualify for the credit.

However, that shortcoming is being addressed by legislation the General Assembly passed in 2020 requiring audits for all film projects receiving the credits. While expenditures for nonresident wages and out-of-state vendors are still eligible for the credit, the audits are expected to reduce ineligible expenditures for work performed outside the state.

The economic development agency generally agreed with or had no comment on the review’s findings.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.

Leave a Reply

Your email address will not be published.