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Film Incentives

10 REASONS ARIZONA NEEDS A NEW FILM INCENTIVE

To help bring filmmaking back to Arizona, an incentive bill currently is being considered by the Arizona Legislature. Follow the progress of SB1242, the Multimedia Production Tax Incentives bill, with updates from the Arizona Film and Media Coalition

 

1.  JOBS

  • The average annual wage of occupations within the film industry in AZ is $53,000.1
  • For every 100 persons employed by the film industry, another 208 jobs exist to support it.2
  • New Mexico’s Film Incentive program grew their resident crew base from 200 in 2007 to over 1600 in 2012.3 North Carolina documented 3300 jobs for resident crew in 2012.4


2. ECONOMIC IMPACT

  • A TV series will spend $25 million or more5 and an average feature will spend $10 million or more on in-state wages, goods and services.6 
  • North Carolina documented $300 million and New Mexico documented over $224 million in direct in-state spending in 2012 as a result of their programs.7  
  • In-state spending grows as more in-state workers and in-state suppliers are used, and investment is channeled to studio construction and other activities that are above and beyond expenditures eligible for credits.


3. ROI – TAX REVENUE GENERATOR

  • Nearly every state and local tax imposed is affected by film company activity- personal income taxes, sales taxes, excises on fuel, alcohol and tobacco products, hotel bed and rental car taxes, corporate income taxes, property taxes and more.8
  • A 2010 ESI Economic Impact Analysis of a 20% Arizona tax credit forecasted a $1.08 return to the state’s General Fund for every dollar invested…an 8% profit.9


4. FILM TOURISM

  • A successful film is the biggest billboard a state can have.
  • Old Tucson was once the 2nd most visited tourist attraction in Arizona, just after the Grand Canyon. 
  • Films and TV shows shot in New Mexico resulted in tourism increasing by 4.3% in 2011.10


5. LEVELS THE PLAYING FIELD

  • Over 40 states - and dozens of countries - have film incentives which they continue to renew.
  • 31 states offer “refundable” tax credits - like this bill - including New Mexico and Utah; 16 states offer “transferable” tax credits. Canadian provinces have offered a variety of tax credits for over 30 years.
  • The proposed Arizona tax credit program is more conservative than New Mexico’s and many other states, but it’s competitive in every other way.


6. SMARTEST INCENTIVES IN THE US 

  • The Arizona tax credit favors returning TV series because of the 6 – 9 month production schedule which means more high-wage jobs and over $25 million in spending.
  • It offers a 20% rebate on qualified Arizona expenditures to studios and production companies who qualify.
  • It has a $15 million per project annual cap and $70 million annual cap on available tax credits—which translates to potentially $300 million in “qualified” Arizona expenditures and millions more in “unqualified,” indirect and induced spending.


7. FISCALLY RESPONSIBLE

  • This Arizona incentive is much like the jobs bill passed by the Legislature (HB 2815) and which was signed into law by Governor Brewer in May 2012.
  • Not one tax credit is issued by the state until after the production has wrapped.
  • An audit is conducted at the production company’s expense by an independent Arizona licensed CPA who is approved by the Arizona Commerce Authority. 


8.  EDUCATION AND NETWORKING OPPORTUNITIES

  • Arizona film and TV production students would have access to jobs and connected industry professionals and would not have to leave the state.  
  • Apprenticeship programs with production career tracks for high school students are encouraged.


9. INDUSTRY WANTS TO BE HERE

  • Arizona’s proximity to Los Angeles, the diversity of our locations, our predictable weather and our experienced crew base make Arizona highly desireable to the studios.
  • DJANGO UNCHAINED, THE LONE RANGER, 3:10 TO YUMA, TRUE GRIT and other films and TV series wanted to film here here but decided against it for lack of a viable incentive.11
 

10. REVIVES ARIZONA'S LEGACY

  • Arizona was one of the top 3 film industry destinations. Now we are in the bottom 3.
  • A major motion picture has not been based in Arizona since Will Ferrell’s EVERYTHING MUST GO filmed in April of 2010.
 

  1. “Economic and Fiscal Impact Analysis of Proposed Motion Picture Tax Credit (SB1409),” Study prepared by ESI Corporation and commissioned by Bruce Bodner Company for potential studio in Avondale, AZ. April 2010. p. 1.
  2. IBID
  3. New Mexico Film Office; www.nmfilm.com
  4. North Carolina Film Office; www.ncfilm.com
  5. Walt Disney Studios; Location budget prepared for potential TV series to be filmed in Phoenix in 2012.
  6. “Evaluating the effectiveness of state film tax credit programs,” Study prepared by Ernst Young commissioned by the Motion Picture Association of America. 2012. p. 12 
  7. Op. cit. New Mexico Film Office, North Carolina Film Office
  8. Op. cit. Ernst Young for the Motion Picture Association of America. 2012. p. 5.
  9. Op. cit. ESI Corp for Bruce Bodner Company. 2010. p. 2.
  10. “Economic and Fiscal Impacts of the New Mexico Film Production Tax Credit,” Study prepared by Ernst Young commissioned by the New Mexico State Film Office and State Investment Council; January 2009. p. 9 

Compiled by the Tucson Film Office, a division of the Metropolitan Tucson, Convention & Visitors Bureau