But… They're Movie Stars!

Although written a few weeks ago, this USA Today article just came to my attention in a National Governors Association newsletter.

Hooray for movie locations outside Hollywood

According to the article,

While California retains a lion’s share of the industry (it spends $38 billion each year within its borders on film production, according to The Hollywood Reporter), 43 states offer some form of production incentives, according to the National Governors Association for Best Practices. They come as aggressive rebates (New Mexico, Michigan) or tax credits (Louisiana, Connecticut, Georgia, Illinois).

I think a more appropriate title might be “Hooray for an increasingly complex tax code.”

Budget concerns, scenery, and accessibility are a no-brainer for the film industry. What state governments don’t seem to grasp is that THE FILM CREWS WILL GO THERE ANYWAY, regardless of tax breaks or rebate.

But when one state offers tax incentives to a favored industry, others have to do so as well in order to be competitive (as a side note, for more on tax competition, check out Dan Mitchell‘s work.) So… states get it on the “luring industries to our states” level, but not on the “income taxes/ corporate taxes/ other miscellaneous fees and taxes” level? Interesting.