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Study reveals potential $10 million loss without film incentive

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By Hunter Ingram
Hunter.Ingram@StarNewsOnline.com

WILMINGTON, NC (StarNews) -- New Hanover County could see an estimated loss of more than $10 million in tax revenue if the state's film incentive expires at the end of 2014, according to initial findings of a study released Monday.

The study, commissioned in September by the Wilmington Regional Film Commission with the assistance of other state entities, is being conducted by researchers at N.C. State University and looks at the financial impact of the film industry in the state. The current film incentive, which has a "sunset" expiration date at the end of 2014, gives qualifying productions a 25 percent refundable tax credit on money spent on certain services in the state.

"What was released Monday is just the first layer of the onion. There is the bigger study that all of this is part of that looks at filming statewide," said Johnny Griffin, director of the Wilmington Regional Film Commission, who said a need for localized figures led his office to ask researchers for an early "snapshot" of New Hanover County's figures. "We have enough general information that allows us to make some general assumptions and broad strokes, knowing the figures will change and, we think, change for the better as we get more detailed information."

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Eat mor chikin?

The Cathy family (Chic-fil-A) is bankrolling Atlanta's Pinewood Studios.

They also give big $$ to Republican politicians (Gov McCrory amongst others) .

Who BENEFITS when NC lets its film incentives expire? Georgia. Follow the money.

The Governor and a few local representatives are willing to sell our state's film industry to Georgia in exchange for campaign donations.

There's more to come on this story.

Say what?

That's a bit of a stretch there chicken-guy.

Well, maybe not if you're into all of that conspiracy stuff. :-)

Reveals Potential 10M Loss?

As more and more corporate welfare businesses line up with their hands out..........Why don't we just require the receipts? The tax revenue generated each year could be an exact figure if these industries possess simple addition skills. The economic benefit could be proven down to the penny with receipts. There is not any need to estimate or guess, just show the receipts. This process is simple, exact, and here's the kicker.....it would be truthful. Then you need to subtract any unemployment benefits members of this industry collect during the year along with the incentives and extra costs for law enforcement. If all of this is verified, then we could end the argument and see whether there is true benefit (profit) when compared to actual cost.

Bribery used to be against the law.......I guess it depends on who is doing the bribery and who is accepting the bribes as to whether it is prosecuted. I would compare it to grave robbing.......How many years have to pass before grave robbing becomes archeology? And......Why can only a select few become archeologists while others are still prosecuted? I would imagine that King Tut would insist that his grave (tomb) and remains were robbed...........

NC paid over $3M, I believe,

NC paid over $3M, I believe, to Journey 2. Do you think we really saw $3M in economic benefits from that?

How can this "reporter" just report (read: parrot) these things as true? How can the headline just present it as if it's true?

Film "Incentives"

While it's great to have films made in the area, the business of incentives is out of hand. If ALL areas of the country would stop this corporate welfare, then the film industry would find places with talented people and good locations, like SENC, to work from.

It just seems terribly unfair to give away millions to one industry while thousands of small businesses make up the gap. The bottom line is that this is corporate welfare.

If the film industry only shoots here because they get money for it, so much for their dedication to the community, huh?

"Incentives" = "Rebates"

The term "incentives" seems to be what is troubling everyone. More accurately, these are "rebates". The state does not "give away millions" at all. Just like a mail-in-rebate for something you purchase in a store...if you don't make the purchase...nothing is given back.

Think of it like this:

You are in the market for a new television. There are 50 stores (states) in a mall that carry the EXACT same television. Some of the stores have a flat price. Other stores offer a mail-in-rebate if you purchase your television from them. Being the smart individual that you are, you do your research and discover that the rebates range from 5% to 25%. So, you go to the store offering the 25% rebate because you are a savvy shopper indeed.

You spend $1000.00 on your new TV. A few months later, your mail-in-rebate check arrives and you bet $250.00 back. You're happy because you saved money...and the store is happy because they made $750.00 that they didn't have before. The store can now pay it's employees, rent, utilities, etc...

Unfortunately, the stores not offering rebates made NOTHING and had to inform their employees (the taxpayers) that their advertising didn't work and they must all be let-go due to lack of funds. The store closes and the employees leave to find jobs elsewhere.

Thanks for clearing that up !

So, what you're saying is that we should think in terms of "rebates" instead of "incentives".

That is so good to know! After reading your explanation, I can totally now see that we no longer need the NC Film "Incentive" Program.

Sound a little crazy? So does your explanation.

FYI oh genius of economic semantics: The rebates ARE the incentives.

Also FYI: If it's just that simple, then let's give "rebates" to everyone and we'll make even more money!

No it's NOT a rebate

At the end of this I hope you will understand why the industry WANTS you to believe it's a rebate.
First - assume that the average tax paid in NC is 7%. That is average payroll, sales, corporate meal and other state taxes.
I will keep the numbers small so you can all understand.
A film company spends $100 filming a movie. The state reaps $7 as they collect taxes on all direct spending. The film incentive is 25% of qualified MONIES SPENT - so the state pays out $25 to that film company. They take in $7 and pay out $25 so the state loses money.

Here's how a TRUE rebate would work - film company spends $100 and pays $7 in taxes. The state then gives them a rebate of 25% so the rebate is $1.80.
THAT'S a rebate - and one that even the GOP could endorse but the film incentive is based upon monies spent but paid out in monies collected by the state from all taxpayers.
GET IT?
This is JUST one of the fallacies the film industry WANTS you to believe.
The other is this.
They want you to believe that somehow the state magically takes in all monies spent by the film industry and anyone with half a brain knows thats not true.
Its like Home depot - they buy goods that they sell. If you send $100 Home depot has to pay those suppliers for those goods - Home Depots profits are about 6% or about $6 - they don't "count" sales as profits.
The state ONLY takes in what can be taxes NOT what is spent so the incentive is just what it is - a pay off, a bribe.

I have said that a true rebate would be acceptable - and it would be but right now? We give more than we get.
It needs to stop

Vog

That's not how it works in GA ...

Not sure how the law works in NC, but Georgia's program offers a 20 percent tax credit (not rebate) to companies that spend $500,000 or more on production and post-production, either in a single production or on multiple projects. Companies can also receive an additional 10 percent tax credit if the finished project includes the peach logo in the credits. Further, Georgia allows production companies to transfer or sell the tax credits to a third party if the company has little or no Georgia tax liability. There are even brokers that will match up production companies with Georgia taxpayers for a fee -- usually 10-15 percent.

It's a win win IMO ...

Rebate???

One other thing, why doesn't the Government offer everybody the 25% rebate to All of the businesses and the taxpayers. This would give everybody more money to spend and eliminate the need to let any workers go......Of course the government would probably run out of money and the stores with poor business plans would still go out of business. I guess they could form business plans that did not require handouts from the government and stand on their own 2 feet.......what a novel, unrealistic idea this is.

Wilmington Regional Film

Wilmington Regional Film Commission 
No doubt an impartial, disinterested, third party.

Johnny

is definitely interested. He draws over $100,000 annually plus perks, bennies, and expenses.

Has he ever traveled to Hollywood in an attempt to drum up business? If memory serves me, Smiley did not even include him in her party when she traveled to Hollywood in 2012 to get the scoop on what NC should do to promote business.

Was he in Raleigh during the last legislative session trying to drum up support?

Does that show how significant he is?

Yep

Might be just a tad self serving.