Dazzled by the allure of Hollywood, some New Hampshire legislators have spent years trying to create a state tax incentive program for the film production industry. These efforts have died like a B-movie villain year after year, but they return from the grave at the start of each new session. Research from other states shows that these incentives cost more than they bring in. They are worse investments than Pauly Shore movies.
After expanding in the first decade of the 20th century, state financial incentives for the film industry suffered a nationwide retreat in the second decade as states abandoned them after seeing the terrible returns. In this briefing paper, we show that New Hampshire legislators should forget these financial flops and focus instead on maintaining the state’s regime of low taxes for all businesses.
The state film production incentive highlight reel is a disaster:
- A report from Massachusetts found that from 2006-2015 its program produced just 14 cents of new tax revenue per dollar spent on the program, only 34.3 percent of credit-eligible spending was in-state, and net generated in-state spending was less than the value of the tax credits.
- A review of Rhode Island’s program concluded that, at best, it lost $1.8 million per year in tax revenue, and that it produced just 94 new film industry jobs in 13 years.
- Georgia’s program, the most generous in the country, has spent more than $4 billion on production incentives over the last 10 years, but “the return on investment appears to be quite small,” as each new full-time job in the industry has cost taxpayers at least $119,000.
Read the full the briefing paper here to see why New Hampshire should avoid these financial flops: Bartlett Brief – Film Production Incentives.