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1 Joseph Henchman, More States Abandon Film Tax Incentives as Programs' Ineffectiveness Becomes More Apparent 1 (2011)

handle is hein.taxfoundation/ffchcxz0001 and id is 1 raw text is: June 2, 2011
No. 272
More States Abandon Film Tax Incentives
as Programs' Ineffectiveness Becomes More
Apparent
By
Joseph Henchman
Film tax credits fail to live up to their promises to encourage economic growth overall and to raise tax
revenue. States claim these incentives create jobs, but the jobs created are mostly temporary positions, often
transplanted from other states. Furthermore, the competition among states transfers a large portion of
potential gains to the movie industry, not to local businesses or state coffers.
In 2010, a record 40 states offered $1.4 billion in film and television tax incentives. All told, states have
provided nearly $6 billion for such programs over the past decade. 2010 will likely stand as the peak year,
since many governors and legislators are ending their programs, preferring to use the money for other
priorities or leave it with taxpayers. Recent eliminations or suspensions:
   Arizona ended its program after 2010 and efforts to renew it have not advanced.'
   Arkansas appropriated no funds for its program for 2011.
   Idaho appropriated no funds for its program for 2011.
*   Iowa suspended its program in 2009 after widespread fraud and abuse was discovered.2 Another film
producer was sentenced to 10 years inprison this week related to that scandal.3
   Kansas has suspended its program.4
   Maine appropriated no funds for its program for 2011.
   New Jersey suspended its program,5 although some legislators are ushina for its reinstatement.6
Joseph Henchman is Vice President of State 6 Legal Projects at the Tax Foundation.
1 David Madrid, Arizona Film Projects in Danger if Tax Incentive Expires, The Arizona Republic, May 26, 2010,
http;//wv xwazcentral.com/arizonarepublic/local/aricles!20 10/05/26/20100O526arizona-film-tax-credhitml.
2 Richard Verrier, Iowa Film Tax Credit Program Racked by Scandal, Los Angeles Times, January 19, 2011,
http;/ar ticks.latimes.comn/20 11 1(jan19/business/la-fi-ct-onlocation-20 110119.
SJoe Barrett, Tax-Credit Fraud Puts Filmmaker in Prison, Wall Street Journal, May 18, 2011,
http:/!online.wsj.com/art~icle/SB 1000l1424i052748704i28 10 i05763297214477003598.html?mod googlenews wsi.
4 Film Production Credit, Kansas Department of Revenue, last update October 28, 2010,
http://wv.ksrevenue.or g/taxcredits-filmn.htm.

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