State Film Incentive

The Competition for Production Dollars

A state film incentive is a government policy designed to lure film, television, and digital media productions to shoot within that state’s borders. In an intensely competitive global market, these programs act as a major financial inducement for producers when they are deciding where to film. The primary goal is economic: by attracting productions, a state aims to create jobs for local crews, generate revenue for local businesses (hotels, caterers, equipment houses, etc.), and boost tourism by showcasing the state on screen.

The Main Types of Incentives

While each state’s program has unique rules, the incentives themselves generally fall into three categories:

1. Film Tax Credits: The most common type. The state provides the production with a credit to offset its tax liability. These are often transferable, meaning they can be sold for cash. This is the dominant model in states like Georgia and New York.
2. Cash Rebates: A more direct approach. After a production completes its work and submits an audit of its in-state spending, the state sends the company a direct cash payment for a percentage of that spending. Louisiana has famously used this model.
3. Grants: The least common type. The state provides a direct, upfront sum of money to the production. This is often reserved for smaller, local productions or projects that meet very specific cultural criteria.

The ‘Runaway Production’ Problem

These incentive programs proliferated in the early 2000s as a direct response to the phenomenon known as ‘runaway production.’ This term describes the trend of U.S.-based film and television productions leaving the country to shoot in locations like Canada, the United Kingdom, or Eastern Europe, where government subsidies and a favorable exchange rate made filming significantly cheaper. State incentive programs were created to make filming in the U.S. financially competitive again.

The Ongoing Debate

State film incentives are the subject of a continuous economic and political debate.

• Proponents argue that the programs create high-paying jobs, build a permanent local crew base, stimulate a wide range of local businesses, and generate a positive return on investment for the state.
• Critics often challenge these economic claims, arguing that the jobs are temporary and that the state gives away more in tax revenue than it receives in economic benefits. They contend that the money could be better spent on other public services.