Tax Credit In The Film Industry

While many have opposed the film tax credit on the basis that industries should not receive money from the government, this argument loses its grandeur when the amount of money the government makes back from the film industry is brought to light (Binker). In 2012, about 83 million dollars was paid to the film industry in tax credits, the most ever paid in a single year in North Carolina’s history (Binker). However, a study found that for every one dollar paid in tax credits, 1.52 dollars in tax revenue was generated from the film industry, and 9.10 dollars of direct spending was put back into the economy (Binker). This means that when the tax credits were in effect, the state was receiving more than enough tax revenue to pay back what was paid

Ken Fisher has worked with the film industry since before the 25 percent tax credit. He is an account representative for Hertz, a company whose local store rents out heavy machinery for use in film productions (Fisher). Productions commonly rent machinery that is particularly designed for use in lighting and special effects, such as water trucks and stake-body trucks, from Hertz (Fisher). According to Fisher, the loss of the 25 percent tax credit has led to significant drops in the amount of business he does with productions. When the tax credit was in effect, about 30 percent of his business was purely film related. Since the end of the tax credit this number has dropped to about 5 or 10 percent (Fisher). The effects of losing the industry can actually be seen at the local store as well; “Things like black-arm booms, and things that we have specifically for the film business are sitting out there on the yard, idle” (Fisher). This is devastating to locals working for the business because when machinery is left sitting too long it gets moved to other Hertz stores, usually out of state. “We have other stores, in other areas, and they’re busy with films. South Carolina and Georgia, they’re very busy” (Fisher). If the industry continues to decline as it

The industry directly supports about 4,200 full time jobs across the state, jobs that pay, on average, 60,000 dollars a year (Binker). Compare this to the average pay of workers in other occupations across the state, 36,000 dollars annually (Connaughton). While there are other businesses that can employ a similar number of people, the compensation levels of the film industry are hard to compete with. The film industry is also unique in its effect on creating indirect jobs. Its is estimated that for every 100 people employed directly by a film production, about 52 other full time jobs are supported by the production’s spending (Connaughton). In fact, employee compensation in the Charlotte area alone increased by about 118 million dollars due to the film industry (Connaughton). It is fiscally irresponsible to threaten any industry that supports so many well-paying jobs, especially when these jobs are in demand in other