The movie industry got a step closer to better tax treatment in North Carolina as the state Senate on Wednesday approved a bill on a party line vote 27-17 to increase tax credits for qualifying expenses to 25 percent. It still has to be approved by the House before it is implemented, though.
Sweetening the incentive pot for the motion picture companies came to the forefront in recent weeks after the state lost out to Georgia for the production of “The Last Song,” which is based on the novel by Nicholas Sparks.
North Carolina’s present incentive of 15 percent has not kept up with the escalation other states have offered. Georgia’s package of incentives includes a 30 percent credit, and that has helped that state attract numerous productions that otherwise may have landed in North Carolina. North Carolina and Georgia were the finalists to produce “The Last Song,” but it went to the Peach State after the revenue officials here ruled that certain expenses would not qualify.
Opponents of the bill tried one final time to amend the bill and place a hard cap on the total amount of tax credit the state could offer in a year. That amendment also failed on a party line vote.
Sen. Julia Boseman, D-New Hanover, called the amendment bad policy because movie companies wouldn’t consider North Carolina if they were about to bump up against a tax credit cap.
“Movie companies wouldn’t come here if they knew they couldn’t get the tax credit,” Boseman said. “The movie industry can have a positive impact on the state because of the type of jobs it brings to the state.”
Sen. David Hoyle, D-Gaston, spoke in favor of the bill and explained how small businesses have benefited from being hired by production companies.
“In my area, there are a lot of commercials produced and when the production companies come here and contract with small businesses, those dollars are spent locally,” Hoyle said. “They’re hiring carpenters, electricians. Those jobs are easier to hire locally. It means a lot.”
How the tax credit fits into the final state budget picture remains unclear. It could be taken up as a separate issue by the House or it could just be rolled into the final state budget bill. By passing the Senate, it definitely is in play as the House and Senate budget negotiators begin their talks to finalize the new budget.