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When it comes to film and TV production, you would probably think of Los Angeles before you think of Shreveport, La. But, due to tax incentives, big-name productions are looking east of the Hollywood Hills, and shooting in non-traditional locations. While production companies save, municipalities can see economic booms.
Chiquita Banks, a Georgia-based tax attorney who helped write the state's incentive program, says there are four main types of incentives states offer. They are:
Refundable tax credits - After hitting a certain threshold of spending, a production company gets a credit provided by the state. The refundable credit consists of the excess production credits remaining after all income taxes are paid, and are received regardless of income tax liability.
Transferable tax credits - A non-refundable tax credit that a production company can sell to local taxpayers if the credits are not used to
offset the company's tax liability.
Non-refundable tax credits - The state offers credits that can only be used on the production company's state income tax return or the return of its parent company.
Rebates/Grants - The state offers direct payments to the production company. This is relatively rare, but an example would be the Virginia Governors Fund.
Some states, like Louisiana, Oklahoma and Tennessee use a combination of the above incentives, according to Banks.
But why offer these incentives? Is it worth writing a multi-million dollar check just to have a movie shot within your borders?
Take the blockbuster Iron Man 3 for example. Shot in North Carolina, thanks in part to the state's 25 percent refundable tax credit, the film was a huge economic engine...