NORTH CAROLINA: McCrory NC film credit proposal unveiled - WNCN: News, Weather

McCrory film incentive proposal lowers cap on tax credit

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Proposed changes would cap tax credit payouts at $6 million and narrow the types of qualifying productions. (WECT) Proposed changes would cap tax credit payouts at $6 million and narrow the types of qualifying productions. (WECT)
RALEIGH, N.C. -

Gov. Pat McCrory has proposed changes to North Carolina's film tax credit program that his administration says would cost the state much less than the one set to expire at year's end.

Details on film credit changes sought by McCrory were released late Thursday, when senators filed on the governor's behalf a bill listing changes to legislation for his budget proposal.

The current law gives a 25 percent refund to productions that spend more than $250,000, with a payout cap of $20 million for most productions and no monetary limit on TV series.

Some critics have called the payments too rich when calculated against the number of jobs the industry creates and wanted the credit to expire. Others say the current incentives amended in 2010 should be made permanent because they've helped revive North Carolina's film industry.

The budget "revises the state's film strategy in order to encourage long-term capital investments versus short-term projects with short-term returns," McCrory spokesman Josh Ellis said in a statement, and by "implementing a more cost-effective approach to encourage investment in the film industry in North Carolina."

The proposal would cap the payout at $6 million, narrow the types of qualifying productions — removing talk shows and live sporting events — and substitute the 25 percent credit with tax breaks more closely related to film-related jobs and specific expenses. For example, a production company could receive a credit equal to employee income tax withholding payments, capped at a certain level. Like the current incentive, the proposal would pay out to companies even beyond what they paid in taxes.

Films made in North Carolina during the last fiscal year qualified for $61 million in rebates, according to state government figures. The proposed state tax rebate program would cost about $10 million annually, Ellis said.

McCrory proposes a new credit to encourage construction of permanent production facilities in North Carolina, with a total amount on a project capped at $5 million. Local governments also would have the authority to provide refunds to production companies for local sales and occupancy taxes they incur while making a movie, show TV or commercial.

Vans Stevenson with the Motion Picture Association of America said group officials are gratified McCrory supports continuing the incentive program and are hopeful a final product will "sustain North Carolina's motion picture and television industry as a vibrant source of jobs and economic activity for years to come." McCrory's credits would stay in place through 2017.

North Carolina has been the backdrop to filming "The Hunger Games" and "Iron Man 3," and for "Homeland" and "Under the Dome" on TV.

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