Sunday night brings the 89th Academy Awards, and many are wondering what film will take home the Oscar for Best Picture.
No matter what film wins, one group of people should be thanked during the acceptance speech—taxpayers.
Film is a heavily subsidized industry, and the majority of states have tax incentive programs that lower the cost of production.
These tax credits are determined by production costs, not profits, and many credits are transferrable or refundable.
When a film’s tax liabilities are below its allotted refundable credits, taxpayers end up directly paying film companies the difference.
The Big Short, one of this year’s nominees, cost $28 million to produce and was filmed in California, Nevada, and Louisiana.
...States are starting to realize that the economic benefits of film tax credits are pure fantasy, like some movie plots. In 2012, 40 states offered tax incentives, at a total cost of $1.4 billion, but since then some states have decided that maintaining roads, funding schools, staffing police departments, and letting residents keep more income are better uses of funds.
Since last year’s Oscars, Alaska, Michigan, and Illinois all ended their film tax credit programs. (See my testimony for the Alaska Senate on the false promise of film tax credits here).
...It is not only Oscar-nominated movies that receive sweetheart tax deals.
Television shows, including HBO’s VEEP and Netflix’s House of Cards, are two examples.
...Film tax credit programs do not pay for themselves.
They do not create long-term jobs, nor do they have tourism benefits.
All film tax incentives do is provide opportunities for politicians to rub elbows with movie stars..."
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