Governor’s budget bill proposes big changes for NC film incentives

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Submitted: Fri, 05/23/2014 - 3:59am
Updated: Fri, 05/23/2014 - 12:11pm

WILMINGTON, NC (WWAY) — A bill filed in the North Carolina Senate today presents Gov. Pat McCrory’s plan for the state budget, and with it a drastically different plan to give incentives to film projects.

The current incentive, which is set to expire at the end of the year, provides a 25 percent credit up to $20 million for productions that spend at least $250,000 in qualifying expenses. McCrory’s plan is much different.

Under the proposal, productions must spend at least $1 million in qualifying expenses to be eligible for a tax credit, which maxes out at $6 million. Also gone is the flat credit rate. Instead, the proposal offers the following credit:

-5.3 percent of money spent on payroll
-4 percent of money spent on goods and services from non North Carolina-based companies
-5 percent of money spent on goods and serves from North Carolina-based companies

The plan would also forgive the state’s share of sales and use taxes (2.5 percent for each dollar), the state’s corporate tax (currently 6.9 percent) and the state’s tax on fuel.

McCrory’s budget plan also puts some of the burden on local governments. It allows county commissions to vote to give up their share of sales and use taxes, as well as exempting productions from room occupancy taxes.

The governor’s budget proposal also creates incentives that would promote building production and post-production facilities in the Tar Heel State.


  • Vog46 says:

    Just drove a stake through Susie Hamilton’s bill – and in turn through the film industry.
    He just took FULL BLAME for ending the current incentive program by proposing this. Now Hamiltons bill will languish and die in committee because the Governor already “took a stand”
    The Legislature can now just go along with it – be it right or wrong.

    Hey film supporters – who’t to blame?
    When you believe your own drivel, and pay for studies that have your desired outcome as a precursor to obtaining funding for those studies THEN you don’t believe or even read the myriad of studies that PROVE your study to be wrong? You’ve got no one to blame but yourselves.
    When you advertise for a rally of support and only get a handful of your own people to attend that sends a powerful message of complacency to Raleigh. I, unlike SC Tom, believe you had lobbyists there and they were as ineffective as Johnny Griffin is.
    Now the city should scale back on funding as well and use those savings to help pay police and firemen MORE than they are currently getting.
    I am astonished by the impotency shown by your group and the blatant disregard of how you get things done with the Legislative body in the state.
    Well there’s still hope – the Legislature could go against McCrory’s wishes……….


  • Jon Fitz says:

    It’s disturbing how much support there exists (From proclaimed liberals especially) for something that is (A) plain old corporate welfare and (B) actually LOSES money for the state. Even more disturbing is the Media in NC has no interest in the fraudulent claims made by these MPAA studies, ROI’s that make no mathematical sense, or the fact that Robert Handfield has deleted his blog, TWICE in order to avoid being questioned publicly about his ability to do basic arithmetic.

  • joshjenkins says:

    75% of anything > 0% of nothing.

    Get rid of the incentives and the film industry WILL LEAVE because they are a BUSINESS. JOBS, JOBS, JOBS are what McCrory/GOP campaigned on. Will they support NC or just be toadies for ALEC/Art Pope?

  • Jon Fitz says:

    Production companies usually owe very little in taxes to the state. You can actually owe literally nothing in taxes, and still receive the credit. Thus “Refundable Tax Credit” is a pretty misleading name. It’s more of a cash grant or subsidy. The industry will probably leave, but your state has been losing money trying to keep it there. Every $1 dollar spent, you make .60¢ back, so that math doesn’t quite add up to a good deal.

  • jj says:

    Iron Man 3 Grossed 1.2 Billion and how much of the profit did NC get? However, we can them a tax break. NC came out the loser.

    Is there a possibility that NC will lose jobs? Yes, this is a possibility, but films were being made in NC before we started giving money away and I am sure it will continue after we stop. If not the works will move or find other jobs. I know people that have moved to Wilmington for better jobs and I know people that have moved away for the same reason.

    My question is does the movie works get a weekly check even when there is no filming here? What do they do to make money when no one is filming? Do they get unemployment?

    I do not feel it is right to take my tax money and bribed people to do business. If you are going to give them a tax break you need to do it for every business that spends money in NC to hire people and produce a product.

  • Peter says:

    You silly… there is many tax credits for qualified tax payers.. first you need to be making money = working hard, to be eligible for tax breaks. Big businesses SHOULD be rewarded for the what they have achieved. They take risk and stimulate the economy. You silly.

  • Mechanic says:

    Too bad the taxpayers don’t get a hefty break like this. As usual, big business always wins and we pay to pick up the slack for what they don’t pay. As far as I am concerned, the film industry could leave NC permanently, never to return.

  • jj says:

    To Answer your question “So ask yourself this simple question. Do you want the Film Industry that has been growing in the state since the 1980s to be here or not? ”

    NO, if it is going to cost me money and using my tax dollars for this is costing me money.

    Let them go. If it is costing the state money to have them here them we don’t need them.

    I heard that the state is losing .40 cent on every dollar they give credit for. Maybe, the companies (like yours) should have to pay an additional tax to make up this lost. Why should I? I am not making anything from them.

  • Justin Goff says:

    Make no mistake people. If this revision passes, the Film Industry in NC is dead. You all can say what you want for or against the details, but the bottom line is if the Incentive is not competitive to other states, then no film. PERIOD. This new proposal is so UNCOMPETITIVE, it would have basically been the same to say they are not renewing the Film Incentives at all. Like it or not, this is how the film industry works now. There is no turning back at this point. We are not “FIlm Hippies”. Film is a real business. I have made my living in this industry for 4 years now with my own business in NC, It pays my bills, buys my food, puts gas in my car, etc.. This is real people, Film Incentives are the foundation of where production happens in the WORLD. Everything else is second. So ask yourself this simple question. Do you want the Film Industry that has been growing in the state since the 1980s to be here or not? If not, vote for this revision. If so, vote for the new bill Susi Hamilton proposed, HB 1142. Choose carefully, because this truly is your last chance to have Film in this state. If you don’t believe me, let this stay as Pat McCrory wants, and live with the consequences forever. Because once its gone, NC will lose so much ground to other competitive states, that we will only be getting the scraps if it ever comes back.

  • Timothy Turner says:

    Different industry but let’s not forget auto makers (and possibly aviation?) that were looking for new plants. BMW went elsewhere, now film makers will too. You can’t put a price tag on pride but isn’t it great when when someone online talks about a movie and you can say “Yep and it filmed here in ILM”.

    Tax money is going to go SOMEwhere and a percentage will always find fault with it being spent on where it goes be it public housing, roadway flowers, salaries or whatever.. Proponents of each can be passionate for their cause and believe in it and they are not wrong, just have their own values that may differ from others.

    My own view is whatever the cost keep the film alive HERE and reap the secondary benefits that arise from it. Something I have never seen mentioned; how many movie stars or moguls have a second/vacation house here contributing to the tax base? Those would fall by the wayside as well until re-purchased.

  • SurfCityTom says:

    you continue to miss the point.

    It’s not folks like you or I who have the vote.

    It’s the members of the Legislature who will decide.

    Rather than posting on this or other local venues, you and the film industry family members need to send your message to Raleigh.

    Candidly, you should have been doing that a year ago.

    Rallies in Wilmington do nothing.

    Every voter in Wilmington can do nothing. It’s in the hands of the Legislature and Finance Committee.

    It’s really a pretty simple process to understand if you take a few minutes and study basic civics.

    Oddly, I saw Ms. Hamilton’s comment that the Governor’s proposal opens the door to negotiation.

    So will you and the film industry family allow that negotiation? Will you and the film industry family get up to Raleigh to show your support? Or will the film industry family continue beating the doom and gloom drum while snarling like a pack of rabid dogs as you attempt to bite the hands which could feed you?

    In case you missed it, that last approach has failed miserably.

  • Vog46 says:

    Stop drinking the kool-aid:

    ” but the bottom line is if the Incentive is not competitive to other states, then no film. PERIOD.”
    Wrong wrong WRONG and you are going against even your own industry publications which clearly show that many of the top ten big, medium and small cities for filming are in states with no incentives. Filming grew here with no incentive and will continue to grow.

    And then there’s this:
    ” Do you want the Film Industry that has been growing in the state since the 1980s to be here or not? If not, vote for this revision. If so, vote for the new bill Susi Hamilton proposed, HB 1142. Choose carefully, because this truly is your last chance to have Film in this state.”

    Are you THAT stupid? Really? Since when do the people VOTE on legislative bills? This is the crux of the industry’s problems – they think the people will decide – NO they won’t !! It will be legislators that will vote and the governor will sign whatever they pass. Good grief Justin grow up – learn how the legislative process works. Your 500 person “RALLY” showed just how dis-interested even your own group is! Think about it – there’s 100 counties in NC? Thats half a person for each county.
    You don’t stand a chance – your arguments are bereft of independent fact finding. My gawd man your group is flaccid – go take a blue pill.


  • FilmWife says:

    Instead of the government bureaucrats deciding which businesses receive tax breaks/incentives, I propose NC lower ALL corporate income taxes. This way NC offers a better business climate for ALL businesses which will in turn create more jobs…you see where this is going I presume.

  • SurfCityTom says:

    But at the end of the day, the Film Industry Family and its supporters, if any, failed in their media driven effort to bully the Legislature and Governor to bend and kowtow to their wishes.

    They obviously don’t know how the legislative body works.

    They obviously had very ineffective representation in the legislative halls, if any.

    In the end, the scare and earth is ending mantra tactics did not work.

    Aged? Let’s see, I’ve been in Raleigh 3 times since the Legislature convened. 3 opportunities to stop by and communicate in person with Legislators I know by expressing my personal position on film incentives; which by the way, I’ve not done on this venue.

    My comments have focused on an ineffective film industry showing and their failure to accept the limited funds available for these incentives.

    I’ll be up there on Wednesday; will you?

    On a positive note, at least no one is trying to blame Bush.

    The legislative process works if you understand how it works and are proactive.

    It fails to work for bullies, slanderers, and beached whales who do nothing but spout off.

    But keep up those same tactics. McCrory can anticipate 4 more years when he runs for re-election. Rouzer can expect a succesful voter turnout; and Hagen can expect to return to the triad in January if the best you people can do is avoid the issues and truth by taking pot shots at your truly.

    And over the week-end, should you encounter a veteran or a currently serving member of the military, be certain to thank them for their service. It’s only in the land of the free and home of the brave that you can freely make such comments without fear of arrest.

  • SurfCityTom says:

    hide behind an illusionary identity and blame me.

    That’s great.

    Don’t take the time or make an effort to motivate the Legislature or the Governor into believing you’re right.

    You know the film industry position had more holes in it than a tire which ran through a field of nails.

  • SnarkmeisterGeneral says:

    “Webinar”… I agree with you and concur that SC Tom is not more than an aged pontificating gasbag. I can understand that you may not like us northern folks you so charmingly refer to as “yankees”, but insinuating that Tom is one of us is beyond the pale of decency.

  • Vog46 says:

    I’ll type slowly so you can understand and keep the number simple.
    Car rentals is qualifying expense for movie incentive rebates.
    A movie company spends $100 at Enterprise for car rentals and the state taxes that rental at %5 and takes in $5.
    The state pays out that incentive at 25% or $25.
    Enterprise rentals here locally SENDS that money to Enterprise national to pay corporate bills etc. Enterprise makes about 4% profit or about $4 clear.
    NC paid out $25 but took in $5.
    Why do you keep saying NC keeps the other 75%? Its disingenuous at best and an outright lie at worst.


  • molly says:

    You do realize that nothing is “confiscated” from you, right?

    The 25% is a REBATE after all taxes/expenses/revenue have been paid TO the state. The state audits every production afterwards to account for the money spent in North Carolina. They still spent and left 75%. If they don’t come to NC at all….there is 0%! ZERO, ZIP, NADA. But a lot of people will go on unemployment.

    Does Best Buy “own” you money if you’ve never purchased a TV from them?

    A tiny bit of reading comprehension / common sense goes a long way in having a dialogue. And spelling counts also.

  • SurfCityTom says:

    the film industry family will moan and groan; bring out the world is doomed mantra; possibly offer up sacrifices to the sky.

    BUT, will they offer to match incentives by rebating a portion of what they receive in order that the full 25% is present?

    And will Wilmington and NHC step in and allow the rebates within their authority?

    And remember, this is a proposal. Still has to be approved as part of the budget.

  • Webinar says:

    For a guy with that moniker you sure like to share your wisdom and opine daily on Wilmington and NHC. Another yankee I presume. Tell us all again how y’all did it up north. Blah blah blah.

  • molly says:

    At least we have THREE Representatives in Raleigh who truly serve their constituents rather than the Tea Party or Art Pope/Koch Bros/ALEC. (yes, Reps Rick Catlin and Chris Millis, we know who your masters are!)

    Reps. Susi Hamilton, Frank Iler and Ted Davis sponsored legislation to lift the sunset on the incentives in order to preserve jobs and encourage growth in Southeastern NC.

    Please take a moment to thank them and encourage them to fight on:

  • Erlkoenig says:

    Thanks for providing their contact information. I will certainly contact them and ask them why I own the film industry money. Money confiscated from me before I can take care of my own family.

  • jon fitz says:

    you could take a moment to remind them, that ONLY studies commissioned by the MPAA have shown these “incentives” to be a benefit, and the state actually LOSES money doling out this corporate welfare. Not that I’m a fan of corporate welfare….but shouldn’t it at least MAKE money for the state?

  • guest6969696969 says:

    The Dark side of Hollywood…

    Credits The Last Refuge…
    James O’Keefe Documents Extremely Hypocritical Hollywood Team Happily Willing To Undermine U.S. Energy Independence To Benefit Saudi Oil… (Video Sting Included)

    This undercover video is brilliant. James O’Keefe creates a sting where he is willing to finance an anti-fracking movie for Hollywood environmentalists. His approach is to use a fictitious character named Muhammad who will only finance the film under the agreement the film’s intent must be to undermine U.S. energy independence.

    The Hollywood crew consisting of Ed Begley Jr, Mariel Hemingway, and producers Josh and Rebecca Tickell are totally willing to disguise the source of the funding, and they each agree to conspire to undermine the U.S. Energy Economy.

    AND Ya’ll want to give these Folks from Hollywood INCENTIVES???

    video link here—>

  • molly says:

    You are citing James O’Keefe–conservative activist/prankster? Really?? Now the target of a lawsuit by his former employees as well:

  • gibby says:

    We are a NYC based production company with plans to shoot a feature in Charlotte in first quarter 2015. The budget is $800k. If the TC is gone for this level then we will not shoot there.

  • guesty says:

    That must be new math because if I have $1.00 and you give me .25, I now have $1.25 not .75

  • Guestgr says:

    If you have a $1.00 and I give you .25, you still have .75. That is how NC’s film rebate/incentive works. 25% of QUALIFIED EXPENSES is rebated. 75% stays in the state.

    However, if there is NOTHING offered, NOTHING will be in North Carolina.

    ZERO for teachers’ wages, taxes, road improvements, Gov. McCrory’s bomb-proof windows (yes, 1.2 million was spent on that!)

    Teachers are really, really underpaid in this state….obviously.

  • joshjenkins says:

    Ok, using YOUR “logic”, Duke Energy owes ME money since they made THREE BILLION DOLLARS in profit in 2013.

    Good grief, there are some ignorant, ill-informed, delusional people in this world.

    What are “movie works”?

  • jjj says:

    What would you rather have, 60 cents for every dollar of an industry that spends tens of millions of dollars across the whole state? Or 0 cents of the 0 dollars they’ll spend without the incentives? The state isn’t losing anything. That’s just spin. You’re an idiot.

  • Erlkoenig says:

    Don’t worry film hippies. My industry doesn’t get corporate welfare at all and it’s doing fine.

    Just focus more on providing value to your customers, i.e. no more Richard Gere movies.

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