RALEIGH — North Carolina would expand the tax breaks it offers filmmakers to bring productions here under a bill that cleared the House Finance Committee on Wednesday.
The bill, which next goes to the full House, is a grab-bag of tax credits and other incentives to lure businesses to the state. The same measure also would extend tax exemptions for renewable fuel producers, create a sales tax break for wood-chipping equipment and codify preference for North Carolina companies bidding on state contracts.
Under the film proposal, the break for filmmakers would rise from a maximum of $7.5 million to $20 million, depending on how much the production spent.
House lawmakers would also let film productions count the full cost of salaries for actors, producers and the like toward qualifying for the credit. Currently, the state caps the amount of salary counted toward the credit at $1 million.
“I don’t have to tell you how much actors and producers can make,” said Dama Claire Chasle, a partner with The Incentives Office. Her company, based in Santa Monica, Calif., helps film productions evaluate the incentives offered by various states. North Carolina, she said, has lost out on films because of the $1 million “hire cap” on counting salaries.
Raising the total amount of the credit available, Chasle said, would attract larger-scale productions to the state. “Larger feature films will hire more local residents,” she said.
The most high-profile example of North Carolina losing a film project came in 2009, when Walt Disney moved a movie featuring “Hannah Montana” star Miley Cyrus to Georgia at the 11th hour, forcing Gov. Bev Perdue to cancel a news conference scheduled to announce the production’s arrival.
While no one will mistake the Tar Heel state for Tinseltown, North Carolina has been home to some high-profile productions, such as “One Tree Hill,” a television series based in Wilmington. Movies that have filmed in the state include the Renee Zellweger-George Clooney film “Leatherheads,” which made use of landmarks around Greensboro.
Projects have dropped off since then, according to lawmakers, and the House bill is an effort to ramp up recruiting. Perdue went to Hollywood earlier this year and met with film producers.
“She learned first-hand about some of the challenges of bringing a film production to North Carolina,” Perdue spokeswoman Chrissy Pearson said. “She’s always supported the industry and hoped to see it grow because it employs local North Carolinians.”
Pearson said the bill under consideration in the House is consistent with language backed by the governor, who is convinced it will pay off in a boost in entertainment industry jobs.
During the committee meeting, Rep. John Blust, a Greensboro Republican, questioned whether the impact on the state budget made sense if the credits would be used to subsidize the salaries of big-name movie stars like Tom Cruise.
“Mr. Cruise isn’t coming to North Carolina,” said Rep. Pryor Gibson, a Wadesboro Democrat. “There’s zero impact if there’s zero films coming here, and that’s exactly what’s happening here.”
Sen. Phil Berger, an Eden Republican, also questioned the wisdom of ramping up the credits available to filmmakers as the state struggles to find money for public education and Medicaid.
“Why is there a push for this when the one thing everyone agrees on is we’re out of money now and in worse shape for next year?” Berger said. He noted that it had only been a year since North Carolina had expanded its film industry credit.
As other states expand their credits — Michigan recently increased its credit to 42 percent of a film’s cost — there will be pressure to raise North Carolina’s refund.
“There is a constant ratcheting up of the program....At some point, we just need to say no,” Berger said.
Contact Mark Binker at 919) 832-5549 or mark.binker@news-record.com
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