Kansas is about to join the arms race with more than three dozen states that are pumping billions of dollars in incentives to lure film and television productions to their state.
A bill allocating up to $10 million in yearly tax credits to filmmakers emerged again Thursday and was added to another bill that provides a sales tax exemption for select not-for-profit community theaters.
The bill was approved by a House-Senate conference committee on Thursday.
The movie bill calls for providing filmmakers with a 30% tax credit if they spend at least $50,000. The tax credits can increase up to 40% under certain circumstances.
The nonrefundable tax credit would be for eligible expenses for film projects approved by the Commerce Department.
The tax credits would be transferable and could be carried forward for 10 years. The bill passed the Senate twice last year but was never approved in the House.
State officials have previously said that the Kansas Creative Arts Industries Commission receives about four requests a month seeking information about the state’s incentive program, which has been lacking.
Kansas commerce officials estimate that a studio feature film would produce between $125,000 and $260,000 in spending per day, and a television series would generate $15,000 to $110,000 a day.
There are 37 states that now offer tax incentives for film production, including Missouri where Gov. Mike Parson last year signed into law a new film incentives program capped at $16 million a year.
A survey by The New York Times found that states have distributed more than $25 billion to film incentive programs over the last 20 years, although there have been questions raised about whether the money could be used in better ways.
The Missouri program provides a 20% tax credit for all qualifying film productions and an additional 5% tax credit if more than 50% of the production is filmed in Missouri.
An additional 5% tax credit is available if at least 15% of the production is filmed in a rural or blighted area.
An extra 5% tax credit if a certain number of Missouri residents are hired onto these productions and another 5% credit is available if the production depicts the state or region in a positive light, as deemed by the Missouri Department of Economic Development.
Labeled as the “Hollywood of the South,” Georgia has spent at least $5 billion on its program and is looked to as a success story for film incentives.
For instance, it was reported that in 2016, more major feature films were made in Georgia than in California.
In Georgia, companies can receive a credit for 20% of eligible production expenditures with an additional 10% available to companies that offer Georgia marketing opportunities.
An audit report said that in 2022, the Georgia film tax credit resulted in about 37,000 jobs for film production, studio construction and film tourism, as well as the jobs supported in the broader economy.
The audit estimated the production companies directly employed 4,900 people, while another 14,600 jobs resulted from contract workers for those companies.
The New York Times reported that the state of New York has spent more than $7 billion to attract productions from California, which committed $3 billion trying to keep them. Louisiana has invested $3 billion trying to bring Hollywood to the bayou.
The Times said that a report prepared for state auditors in Georgia estimated the tax revenue returned on each dollar spent on incentives was 19 cents.
Another report from the state of New York determined the return was between 15 cents and 31 cents, the newspaper reported.
Stuart Little, who has lobbied for the bill, said the legislation only provides the tax credit after an application has been submitted to the state and approved along with an audit.
He said the state’s 30% tax credit makes it possible for an approved project to spend all of its money in a local Kansas community for food, hotels, catering, equipment, transportation, security and utilities.
“The state provides the tax credit and twice as much is spent in our state,” he said.
The tax credit available in the Kansas bill could increase for projects exceeding $50 million or if the movie company hires 50% of its employees from Kansas.
The tax credit would be for eligible expenses for film projects approved by the Commerce Department.
The proposal also includes a yearly $2 million appropriation for state grants that are intended to develop and support the film and digital media industry workforce and related education programs.
The money could go for grants at four-year public and private universities as well as community colleges and technical colleges for programs related to film, media, digital technology or gaming.
