Production Tax Incentives, such as New Mexico's 25% rebate to productions, are at the heart of today's film industry. Michigan has the most aggressive incentive program in the country, but its likely not sustainable, as the article below will demonstrate.
We're proud that New Mexico's incentives are designed to be sustainable and increasingly transparent, and while other states may come and go on the film landscape, we're a core part of the industry for some time to come. - crewnewmexico.com
The tax credit bringing many Hollywood studios to Michigan could soon see some major changes.
Senate Bill 404, a bipartisan proposal that would top the film tax credit off at $50 million and reduce the available refunds by 7 percent, is being discussed.
The refundable film tax credits would be cut to 35 percent from their current rate of 42 percent.
The bill was introduced on March 25 and is sponsored by State Sens. Nancy Cassis, R-Novi; Jud Gilbert, R-Algonac; Tom George, R-Kalamazoo; and Mickey Switalski, R-Roseville.
“We recognize that Michigan has a significant, large deficit of $2.8 billion, and part of what’s contributing to that is the giveaway money to Hollywood producers,” Cassis said.
The bill would be keeping the film tax credit at $50 million, which would scale back a little on overly generous giveaway money, she said.
“These movie producers are currently not paying taxes in Michigan, but are still getting money,” Cassis said.
The bill would just restore funds to other areas of the state, such as police, fire and Medicare, she said.
Cassis said the bill also would support commercial ads and more jobs.
“We would be able to provide credit for commercials to be done here, and we would hire 90 percent of Michigan workers first,” she said.
In the long run, Cassis said, Bill 404 would recognize all the refundable credits that are not necessarily vital and giving relief to other businesses.
State Sen. Jud Gilbert said even though the majority is not in favor of the bill, it is still necessary.
“The bill is necessary because films last for a short duration, which means the money will run out before anyone gets the subsidy,” Gilbert said.
He said the bill would divert money into a tax relief.
“If the bill passes, people will see gradual employment increases in small businesses with longer durations,” Gilbert said.
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