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VOL. 41 | NO. 20 | Friday, May 19, 2017
How production incentives work
By Joe Morris
Most states offering production incentives for film and television work follow either the tax rebate or cash credit model.
Georgia, for example, offers a transferable tax credit, for a portion of production expenditures, while Tennessee offers a cash rebate system of 25 percent back on money spent on Tennessee labor and products.
According to Bob Raines, Tennessee Entertainment Commissioner, the rebate method provides an advantage for the state because it’s basically a rebate for productions that hit specific benchmarks.
“We have the environment for certain types of productions, usually those projects that will run between $5 million and $10 million, because a rebate is something they don’t have to sell or deal with when they are done,” he says. “If they meet the requirements, they get some money back.”
The state wants specific things, he explains:
-- Branding, something that’s beneficial to the state
-- A Tennessee connection (cast, director, developed by a state company)
-- A specific investment in Tennessee companies
-- Rural filming
“We want to see the back-end money coming to the state; not just the physical production, but the spending that’s going to help cultivate more investment from within the state into other film and television production,” he adds.
If a production says it’s going to spend $1 million, then it qualifies for $250,000 in rebates. That money is set aside, and the production has 12 months to complete its work. After that it submits paperwork and, following an internal audit, gets its check.
“Nashville’’ by the Numbers
The television show is CMT’s most-watched original telecast and is viewed in 82 international markets.
The show has spent $225 million over the past five years in labor goods and services. According to Raines, that’s a direct spend – no indirect or multipliers applied, but “straight into the economy and small businesses.”
The show has contracted with more than 500 Tennessee vendors and companies.
“Nashville,” employs about 250 full-time workers.
According to a state-commissioned study, 18 percent of overnight visitors who watched the show indicated it was a motivating factor to visit the city and state.
“They saw the show, they got off their couch and came here,” Raines says.
“And of those overnight visitors who said “Nashville,’’ was a factor behind their visit, we found they spent $157.8 million each year. That’s $486.7 millions of visitors spending in five years, on top of the $225 million the show spent, money going straight into the local economy.”