A new bill in the NC legislature would very modestly alter North Carolina’s program of tax credits for Hollywood film production. Per the Wilmington Star News:
HB 994, co-sponsored by Rep. Rick Catlin (R-New Hanover) and Rep. Chris Millis (R-Pender), Rep. Paul Stam (R-Wake) and Rep. Paul Luebke (D-Durham), seeks to make the film production credit non-refundable. According to Millis’ explanation, film productions would no longer receive a refund from the state for any income tax credit. Under the proposed bill, the production would instead be entitled to carry the surplus credit forward for the next five years, to use against any future tax liability.
“Individuals in the District and across this State deserve a government that is accountable with their tax dollars,” Millis said in a statement. “HB 994 brings more accountability to our state government by reforming the ability for film productions to carry over their tax credits, instead of receiving a check cut directly from the coffers of hardworking taxpayers.”
Note that the amount of the tax credit isn’t changed, rather the method of granting the credits is altered. Naturally, the rent-seekers in the film industry (and Wilmington-area politicians) are offended that anybody lay a finger on their political privilege – as if they have some sort of moral claim to tax advantages that other less-connected industries don’t enjoy. Rent-seeking is a term used that popularly refers to people or organizations that seek competitive advantages via political means – rather than by working to efficiently provide goods and services for consumers on a level playing field with others.
Rep. Susi Hamilton (D-New Hanover) calls the bill a “jobs killer” for the film industry. “All this bill does is eliminate jobs,” Hamilton said. “No incentives, no film industry. This bill kills jobs in North Carolina.”
In a text message Thursday afternoon, Sen. Thom Goolsby (R-New Hanover) said he does not support the proposed legislation.
Sorry, Reps. Hamilton and Goolsby, but the film tax credits themselves are the real job-killers and obstacle to economic growth. A growing body of research strongly suggests that film tax incentives are net losers for states, and several states have eliminated or scaled back their film incentives programs over the last few years.
If state legislators recognize that lower taxes incentivize more business investment and job creation, why not offer the ultimate “tax credit” to all businesses and investors?