(The Center Square) – The Georgia House has passed legislation to amend tax credits for musical and theatrical productions, which proponents said will help the industries recover from the COVID-19 pandemic, but a Georgia economist said such tax credits make for “bad public policy.”
House Bill 1330, the Georgia Music and Theatre Jobs Recovery Act, would increase existing tax credits for musical or theatrical performances from 15% to 30% and set an annual aggregate cap on the tax credit through 2027.
The measure also would lower the spending threshold required for musical or theatrical performances from $500,000 to $100,000. Under the bill, the threshold for music recorded for a movie, TV or interactive entertainment production would lower from $250,000 to $50,000, while other recorded musical performances would decrease from $100,000 to $50,000.
Royalties resulting from the bill also would be taxable income, according to a news release.
“Our entertainment industries have flourished since we first established tax incentives that draw these productions and creative minds to our state, and this bill would allow these industries and their workers to call Georgia their home for many years to come,” state Rep. Erica Thomas, D-Austell, said in an announcement.
The bill did not have a fiscal estimate attached, so it is unclear how much the incentives might cost the state. However, J.C. Bradbury, a Kennesaw State University economist, said the credits are not in the best interest of taxpayers.
“This bill represents bad public policy. Existing film tax credits have been a monumental policy failure, costing Georgia taxpayers more than $1 billion per year in foregone revenue to the state treasury without providing a positive return on investment,” Bradbury told The Center Square. “This was confirmed by the state auditor two years ago, and numerous economic studies have shown film/entertainment tax credit programs are not successful.
“It is unfortunate that state representatives are seeking to extend this program rather than scale back or end it,” Bradbury added. “Providing tax incentives to the entertainment industry is not consistent with fair treatment of taxpayers in other industries, and all available evidence indicates that entertainment tax credits are not a productive channel for economic development. If state representatives feel that taxes are so high in Georgia that they are deterring business, then they should roll back taxes that impact all businesses even further than they already have.”
This article was published by The Center Square and is republished here with permission. Click here to view the original.
