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FIRST ON 3: Michigan says incentives led 'Iron Man 3' to NC

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WILMINGTON, NC (WWAY) -- We told you yesterday about plans to bring filming of a major motion picture to the Cape Fear. Today, we're learning that producers of "Iron Man 3" may have chosen Wilmington over other locations because of state film incentives.

According to the Detroit Free Press, Michigan originally offered Marvel $13 million in incentives, but upped that to $20 million to match North Carolina. The Michigan Film Office told the newspaper that the film chose North Carolina instead because the money was guaranteed.

Marvel did not respond to requests for comment.

Disclaimer: Comments posted on this, or any story are opinions of those people posting them, and not the views or opinions of WWAY NewsChannel 3, its management or employees. You can view our comment policy here.

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Some miss the point.

Some miss the point. $20,000,000 in incentives. That is $20,000,000 in tax dollars that are either being given or will have to be made up for by others' taxes.

If you use a nice flat tax of 10%, which is surely high, maybe double, what it would really be, That means that the film would have to invest $200,000,000-TWO HUNDRED MILLION- in North Carolina for the state to make back their $20,000,000.

Right....

And you also miss the point

What people need to understand is if NC doesn't have an incentives package it doesn't have a film industry. Hollywood is not under some sort of spell to film in NC. They do it because it makes sense economically, and logistically (crew base/studios). You absolutely have to look at this way. a company out there wants to spend well over 100 million in the state of NC and other states want that money just as bad as we do... we have to be competitive in order to get the production to come here if not that whopping 100+ million dollars goes someplace else.

As for your tax breakdown you forget that Robert Downey Jr and the rest of the "Stars" will be paying NC income tax with there heavy salaries, and will be living here for months spending money in our local shops, and restaurants. That goes for everyone on the payroll here during filming. People say well they get there lumber from Home Depot, and there not a NC company. Do you know that?? They might get it from a locally owned business E.F. Godwin...

Point is you can't look at it from a tax stand point you have to look at it as an economic boost for the area. This money could have easily have gone to Michigan, Louisiana, Georgia... But they decided to come here.

Local businesses get it

Having worked in the film industry for about 20 years, I can support the claim that productions often do use the local businesses in preference to Home Depot, etc. Godwin's, for example, offers personal service and will do the extraordinary when asked for-and that is often the case with set construction. The larger corporate stores don't care how fast you need something. They don't care if they get your business or not. The same is true with locally-owned paint stores, furniture stores, etc. When you can speak to the owner or manager in person and explain any special needs, they understand and will use their resources to make the impossible possible. The small businesses are vital in the infrastructure of the local film industry.

You'd better re-read the tax code

NC will not be the recipient on income taxes for salaries paid to out of state workers here on temporary assignments.

And how much of the actual filming will be done here as opposed to Hollywood?

Nice try though.

BUT, it's called business. Set your emotions aside.

How much financial benefit will NC gain in exchange for the tax incentives?

Easy question. May not be so easy to answer. But set aside the empty platitudes and give some actual bonafide answers.

For the record, how much was actually spent in NC for the Rock's recent movie? Did he or Michael Caine even make an appearance in state?

Tax-Code??

I live in the real world... I work out of state a lot in this business and by doing so I pay income taxes in other states every year. I promise you that the individuals working here from out of state "Distant Hire" will be paying income tax to the great state of NC. So unless your accountant has found a loop hole taxes will be taken out of their paychecks.

Since they are said to be using all ten stages at Screen Gems. I would say they will be here for months...

If you want to talk financial benefit you must look at the whole picture... The production will buy goods from local vendors, and will pay sales tax when doing so. The Vendor makes good business in this economy, and it helps keep businesses open. The Production also will employ hundreds of people who will pay sales tax. these people will also take their "take home pay" to buy local goods to live off of. Some may actually get to put some money on there debt which we all know is a good thing. Word will spread, and people will flock to the area to get a glimpse of the filming process, which guess what that's right they will spend money on hotel rooms, or at least get a bite to eat while doing so... get the picture...

The movie the Rock was in was only here for a short period of time. Most of the movie was made in Hawaii. But both "The Rock", and Michael Caine were both here. and for the short period of time they were here Millions were spent.

I hope I answered some of your questions. If you want more detailed answers contact the local or state film offices, and they can explain to you exact numbers. All I know is without incentives we would be making $0...

Film Supporter: Thank you

Film Supporter:

Thank you for your clear, plain language analysis of both the film incentive program and the potential economic benefits to NC.

A little advice; argument with SC Tom is like shoveling sand against the tide. His mind is made up and you will get nowhere with him.

Tom is right to the extent that his work in Florida (which has no state income tax) is subject to NC tax because he is a resident of this state. What he fails to recognize is that if he were to work in another state WITH an income tax, he would be required to file a non-resident return in THAT state and would be eligible to take a credit against his NC income tax paid.

It seems like Tom is the one who should consult with a new accountant.

What's to argue?

This is really pretty simple to resolve.

Many, including myself, question the value of film incentives.

No one, including the Wilmington or NC Film Czars has given any firm proof that film incentives add value and pay their way.

IronMan 3 is the future. Look at recent past productions. This is about as simple as it gets.

How much incentive was provided to the Rock & Michael Caine production? How many dollars were actually expended in NC for that production?

Put the "argument" to an end.

Give an answer more than "I promise you" or "take my word" as your weak validation for the film incentives.

It can not get much better or easier than that.

Until you do that; until you show in plain dollars and centsthat incentives have an adequate rate of return, you fail to build a case.

And like Democrats and Liberals, everywhere, when you fail to make a case, you fall back on the argument excuse.

To your credit, at least you did not try to lay blame on former President Bush.

Seriously SurfCity Tom-

Seriously SurfCity Tom- Decouple your brain from the Fox News/AM Radio teat for a few weeks and smell the roses.

Seriously cide

did it take a whole week to come up with that witicism? Even a liberal Democrat should be able to do better.

I forgot,the first few days of each month are budgeted for entitlement ativities.

Tom: Some of the information

Tom:

Some of the information necessary to satisfy your inquiries on film incentives may be found at http://www.ncfilm.com/new-25-tax-credit.html I'm more than a little surprised that the "Film Czars" to which you refer didn't promptly, or even eagerly advise you to consult this site.

You will find a tab in this section entitled "Incentive Reports" which includes production companies, expenditures, number of persons employed in NC and the amounts of incentives actually paid to the producers.

Information on "The Rock - Michael Caine" film "Journey 2: The Mysterious Island" can be found here: http://www.imdb.com/title/tt1397514/ The current status of this project is reported as being in post production with a February 2012 anticipated release date.

It should be noted that incentives are not paid out until the production company undergoes an audit after the conclusion of production by the NC Department of Revenue. Incentive payments under this state's program are not paid in advance.

As to the second aspect of your critique, I invite your attention to this paper published by the University of South Carolina's Moore School of Business which explains the multiplier effect of benefits inherent in any business expenditure but in particular the film industry in South Carolina. http://www.moore.sc.edu/UserFiles/moore/Documents/Division%20of%20Resear... Similar analysis was likely considered by the NC Legislature to support its decision to expand our incentive program.

Just like you, Tom, I am disappointed that neither the NC Film Office nor the Wilmington Regional Film Commission have provided underlying economic analysis to support their positions. I differ from you to the extent that I do accept that these tax incentives do benefit the State of NC and more specifically our region.

I have no reason to blame fmr President Bush for anything! It was Bush era legislation, "The American Jobs Creation Act of 2004" which took effect October 22, 2004, included a “new” Internal Revenue Code section 181. The expressed purpose of the Congress was to provide an incentive to certain film makers and television producers to not move their production activities outside of the United States by providing new income tax incentives for investors in film and television projects.

Thanks for the information

see, I really do not argue all the time. I'm not from Missouri, but sometimes I do ask "show me".

I saw an article that indicates Colin Ferrell will be filming in the area in the near future. Aparently a portion of the old hospital in Brunswick County will provide the backdrop.

I also saw an article that Hallmark is to begin filming shortly.

I was not the only one who expressed skepticism over these short term incentives.

It's disappointing Johnny be Good of the Wilmington Film Comission does not take the bull by the horns to address this topic and perhaps make his job easier.

Then too, the media could take some initiative and invite him to the studio for an indepth interview.

That would be live, local, and interactive.

Millions were spent?

during the short time the Rock & Michael Caine were in town?

Now you're just throwing out more of those mindless, no specific answer responses.

How long were they here?

How much was spent?

What was the cost in incentives?

Pretty simple questions.

And with all of the opposition to incentives, perhaps the film office can take the bull by the horns; get the Czar off his duff; and give some specific answers.

Maybe you should get a new accountant. I work out of state throughout the year; my residence is NC; I pay NC income taxes. It would be beneficial if I could claim out of state tax basis; Florida has no state income tax. But it just does not work that way.

answers

Yes maybe just a couple million, but better than no million right?? The movie gets a 25% tax rebate on qualifying expenses. They have already paid a sales tax on the goods at 7%. Once the production is finished they received 25% of 7% back. It isn't possible for me to know what they paid in taxes, and how much the 25% of 7% equated to in their return. Just as much as they don't know how much I paid in taxes last year. So to answer your question no one knows the exact number but the state treasury dept. and the production company. The production was here for about two months...

The opposition to incentives is mind boggling to me as most who argue of it's importance do so without knowing all the facts. As a taxpayer call these people up, and ask for yourself. The local economy benefits from film/tv production.

Here is where your job is a little different from mine. As a Union member if you travel to another Union's jurisdiction you have to pay that union out of your check to work in their juridiction. The Production company hires you on as a distant hire, and you are paid as a local of that state therefore you pay income tax to the state in which you are working. Ask any accountant they will tell you this... and as for Florida they do have a state income tax... they don't pay Federal Income Tax... FYI.

A couple of points

the Film Czar could lay all of this controversy to rest by merely laying out the numbers. No guesses; no hope. Just spell out the finances.

Only then can anyone clearly, and unemotionaly decide if NC is better off with or without the film indistry here.

And I hate to burst your bubble, folks in Florida are subject to Federal income tax. There is no state tax.

Out of State Taxes

No new accountant needed. You do not pay out of state taxes because, as you said, Florida has no state income tax. Therefore, you do not get a credit on your NC return for taxes paid out of state. However, were you to work in NY, you would be required to file a non-resident return in NY. Because you LIVE in NC, you would also be required to file a return in NC. However, you would then receive a credit for your taxes paid in NY by filling out the "Out of State Tax Credit" worksheet on your NC return.

I have to agree with the

I have to agree with the other commenters.

It's great that Iron Man 3 is apparently filming here, but we shouldn't be too quick to applaud any kind of tax incentives.

Michigan had the most generous film incentives of any state and it cost them over $100M:

http://fultonforcouncil.blogspot.com/2011/02/how-other-states-film-incen...

The government gives away taxpayer dollars and doesn't see that much brought back to it in revenue. It also is forced to increase the tax burden on everyone else to pay for these incentives, only hurting the economy more.

Film Incentives

Mr. Fulton,

I don't know if you have talked with local and state officials for the Film Industry, but I suggest you do so... Speak with the people over at the Wilmington Film Commission, and the NC Film Commission. Let them explain how our incentive package works. Our Incentive package is very different than that of Michigan. Your not comparing apples to apples. There is a lot wrong with Michigan's incentive package, and it cost that state dearly. You haven't seen Louisiana or Georgia (two other film friendly states) follow Michigan's lead. Neither did NC. Please educate yourself as a citizen running for public office as to the impact of the film industry in Wilmington, and the state.

As a local film worker I buy my groceries here, I pay my taxes here, I bought a house here, I purchase my vehicles here. I LIVE HERE!!

All I ever see on these blogs is people complaining about this and that just on principle. And they always ask questions such as what is the equation of cost vs. profit for the state... well don't complain about something until you have undeniable proof you have something to complain about.

Well

After reading all your posts, I'm really starting to like you.

Unions Made The Wilmington Film Business

The unions lobbied people like Julia Boseman to boost incentives to the Hollywood film makers. These inflated numbers suggesting that it's 100 million dollar budget make people think that that money is staying here when in fact it's going to super star salaries, $40,000 private jet trips to and from LA, very little is staying here. There are no grip, electric, rental car companies based out of NC. Home Depot is not a NC corporation. There are no sales taxes paid by these companies either.

The unions are the only ones making out (like bandits) over this. This right to work state has been reduced to labor organized closed shops. You want to work on this movie? Buy an $800 membership into the union. It's the only way you can work.

The unions made this town because movie companies were looking for non-union labor, the unions broke the back of this town by driving companies away a few years ago. So to correct it they made the sate of NC cover the difference. Basically the incentive pays the difference between union and non-union labor rates.

And everyone is happy. Look, a taste of something is better than nothing. Let the unions have their cake, we will settle for the crumbs.

Tax Incentive

I'm not in the film industry, but I do know a thing or two about tax. While Home Depot may not be based in NC, any revenue generated by sales in NC would result in NC income tax being paid by Home Depot. Corporations that have operations in multiple states are required to file a return in each state they are operting in. The same goes for rental companies. Also, even if an actor is from out of state, they too would be required to file a NC income tax return for the income earned working in NC. It's called a Non-Resident tax return. You are incorrect in regards to sales tax. While there are SOME exemptions related to purchases made by film production companies for film and film processing, most expenses still require a "privilige tax" to be paid directly to the NC dept of revuenue by the purchaser. And any machinery or equipment purchased would be subject to the locat sales tax rate.

Movie companies pay, at the most, 1% in sales tax

And other stuff.

All businesses and individuals providing accommodations in New Hanover County such as a hotel, motel, inn, residence, or other short term rental, charge a Room Occupancy Tax. This tax is in addition to the state and local Sales and Use Tax of 7.75%. The combined total of taxes on accommodations is 13.75%.

After a guest’s 90th consecutive day of occupancy, collection of all taxes stop (Sales and Use Tax and Room Occupancy Tax), and a refund is issued for all taxes paid (the entire 13.75%) for the first 90 days.

North Carolina does not charge filmmakers for use of state-owned and maintained property. Details below:

§ 143-162.2. Use of public property by production companies.

If a State agency makes real property available to a production company for a production, it shall not charge any fee other than reimbursement of actual costs incurred and actual revenues lost by the agency. As used in this section, the term "production company" has the meaning provided in G.S. 105-164.3. This section does not require a State agency to make real property available to a production company for a production. (2000-153, s. 3.)

Are there sales tax discounts? 1% sales tax cap on all items purchased for use in a production
(NC state sales tax is 7%). For details see: http://www.ncfilm.com/incentives-benefits.html

Trickle down economics at

Trickle down economics at its finest... sorry, I couldn't resist that.

But, here are some more questions: Isn't a member of the Wilmington Film Commission also a union official??? Doesn't the chairman of the Wilmington Film Commission earn $120,000 taxpayer dollars a year in salary???

Beyond absurd!

There is NO way that Johnny Griffin is a member, much less an "official", in the IATSE local. I bet your brain "hertz" if you have to raise such outrageous queries.

ginger... Unknot your

ginger... Unknot your knickers and read.... my original contention was that a union official was a member of the Wilmington Film Commission, NOT that Mr. Griffin was an official in the union.

I do need to stand corrected, however. The union official is a member of the NC Film Council, NOT the Wilmington Film Commission.

Twenty Million Dollars

of incentive? Gauranteed?

Will all of the filming be done in Wilmington?

How many locals will be directly employed in the project?

One would think thre has to be some formula or equation which can be used to determine the cost effectiveness of the incentives?

SurfCityTom...

"One would think thre has to be some formula or equation which can be used to determine the cost effectiveness of the incentives?"

I'm sure you were trying to get a belly laugh from those who read that sentence..."cost effectiveness"? That said, love reading your comments.

what's so funny?

you re-phrased my question in another post.

If the incentives are $20 million; how much is actually spent in NC? How many North Carolinians will be employed? What will their earnings be?

Seems a pretty simple question. But one the Film Czar seems to shy from.

To answer your question...

To answer your question... The film has an estimated budget of over 100 million dollars. I don't know about you but I'll take 80+ million dollars injected into our local economy for a payment of 20 million any day of the week. A movie this size will employ roughly 300 local workers and about 50 out-of-state... All of which will pay NC income tax. As I have heard not all of the film will be made here. Some filming will be done in LA, but a good majority will be filmed here. You don't need fancy equations to do simple math...

The money the local economy will receive will greatly out way the cost of attracting this big budget movie. The tourist effect of such a film will felt for years to come... This is a WIN for Wilmington!!

iron Man? Holy Cow!

I am willing to bet everything I own that 80 million will not be spent here, in fact I will bet that less than 10 million will be spent here. The 100 million dollar figure includes over the line salaries and compensation such as access to private jets.

Most of the money spent here will be spent with screen gems, a NY company, and with other out of state companies. What will be spent here will be salaries for 100-200 workers, including day players and $100/day extra work. The majority of the work will come from out of state due to the lack of crew with skills in special effects and CGI. There will be all kinds of money being spent on hotels and food, some of which will be locally owned businesses.

Is it nice we have this coming here? Yes, it will feed a few people who live and work here. But compare it to McDonalds or Target and you will find that they employ and feed many more people than the film industry will do with this one job and no one gave them a $20 million dollar incentive.

Am I glad it's here? I know my mortgage company is.

It's time for an accurate accounting...

of EXACTLY the amount of tax revenue generated versus the amount of money given to the film companies. NOT money spent, but tax revenue generated because it's TAX money that's being given to the film companies for coming here to film.