It's not easy being gray.
Just ask Florida. The state defunded its state film tax credit program in 2015 and is now a lonely island of gray in a sea of azure blues, burnt orange, and gold-as-in-Spanish-doubloons gold in the map above, provided by EP Financial Solutions. The result for your average grip and PA: well, Florida either "continues to enjoy a healthy film industry" or the film biz is "on life support." I'm guessing that if you split the difference, it's like being half pregnant. Critics of incentives say that Best Picture winner Moonlight was filmed in Florida, so all is good. Variety claims the industry has "foundered."
Either way, production-flush Georgia, with its 20-30% transferable tax credit, has been happy to take up the slack. It turns out Georgia looks a heck of a lot like the Sunshine State. Who knew?
Arizona sunset-ed its film incentives some time ago, and it is more likely that Julia Roberts will win Miss Rodeo Arizona than that she will be handed a 30% tax credit by Governor Doug Ducey any time soon. We, like Florida, sport a charming battleship gray about the temples, and it's not entirely due to our retirement populations. Another shocker? Add up California, Nevada, Utah, Colorado, and New Mexico and you've pretty much got Arizona. Add Texas and you've got Arizona with better chili con carne. Every one of these states offers a production credit or rebate--some as high as 30%. We do still have the Grand Canyon, but I checked and Monument Valley is now officially in southern Utah--here's photographic proof!
Now, I vaguely understand the argument against tax credits and preferences. Sort of like how I understand that Pluto is not a planet but a dog. To wit: they have little or no long-term impact on employment, there is little Return on Investment, in a free market economy government should not be picking "winners and losers," and if Brad Pitt is filming in your state he tips the waitresses a measly 10%--max.
I'd argue the first point; I'll sort-of give you the second; and the third is courtesy of some wonk who lives in The Fairyland at Tinker Bell Cliffs and emails in his white papers via the Magical Unicorn Internet. Government--the feds, state, county, my local fire district--often does little else than pick winners and losers.
Let's take a look at my fair state. It's pretty red, pretty conservative, pretty "tax friendly." Or so I thought. Consider this analysis by the Tax Foundation--not an outfit that suffers spendthrift Hollywood types gladly and no friend of tax credits in any form. It shows how well states structure their tax systems. If you make their Top 10, you're levying and spending taxes "wisely." To save you time: Wyoming is No. 1. New Jersey is No. 50--unless you're the governor and utilizing a state-run beach that you've closed off to the public so you can concentrate on your, uh, tax returns. Then New Jersey is golden.
Where's Arizona on this list? Surprisingly, we're No. 21. Kind of the middle of the pack, although we've bumped up a place or two due to continued cuts in credits and other tax preferences. If we were the Pac-12, we would be the Utah Utes. The Arizona Commerce Authority boasts that the state is No. 1 in projected job growth and that could well be true. But if you're, say, PayPal, and you want to move your Global Operations Center, you might want to consider Florida or North Carolina, No. 4 and 11, respectively on the Fight the Tax Man Index. Turns out, PayPal just did that. They chose North Carolina, former home of Fiona Ritchie, only to pull the deal over a certain House Bill 2--but that's another story.
That would be the same North Carolina with the 25% film tax grant.
You know who else was angling for that PayPal Operations Center with its 400 jobs? The Utah Utes. Hah! I'm joking. Arizona. Who dangled not $2.8 million in tax incentives, like North Carolina, but a $4.4 million package and, I hear, a $50 gift card to Red Robin. In my book that's called picking a winner, although when it comes to the Sauteed 'Shroom burger at Red Robin, we're all winners.
And now to my point, and, boy, it was like driving to Point Barrow to get there. Are there states that do pick winners and losers and have clawed their way into the Tax Foundation's Top 10? There are. They are Oregon, Nevada, and Utah--yes, Utah, which, to this day, denies the existence of Nancy Pelosi. All offer either a refundable or transferable tax credit, or flat out rebate, to qualifying film and media productions. Open it up to the Top 15 and you have three other states with production incentives: North Carolina, Tennessee, and Texas.
Yup, Texas, which has a new state motto: Don't Mess With Texas' 22.5% Production Rebate.
Now, there are tax incentives and there are tax incentives, but it's clear that Arizona is not entirely opposed to them, because the ACA lists a total of 16 on its INCENTIVES page. PayPal understood that. And there's some evidence that you can cut your tax burden and eat your tax credit cake at the same time. Given that, it really comes down to priorities, and if a state is interested in the in-state jobs and blinding Klieg lights of tourist-driving publicity that Hollywood and hometown productions generate, they will pick that particular winner, because, folks, it's what they do.