Lawmakers looking to limit film tax credit
ATLANTA — Legislation introduced in the Georgia House of Representatives would place new limits on the state’s popular film tax credit and suspend the tax exemption aimed at encouraging the construction of high-tech data centers.
The bill is the product of the Joint Tax Credit Review Panel, a committee of state lawmakers formed last year to examine the various tax incentives Georgia offers and determine whether the state is getting a healthy return on the lost revenue.
The panel was co-chaired by Senate Finance Committee chair Chuck Hufstetler, R-Rome, and House Ways and Means Committee chair Shaw Blackmon, R-Bonaire.
“We believe these measures meet an accepted level of fiscal responsibility while at the same time preserving a very business-friendly, jobcreating environment,” said Blackmon, the bill’s chief sponsor.
He and Hufstetler were joined by Lt. Gov. Burt Jones and House Speaker Jon Burns, R-Newington, during a news conference at the Capitol last Wednesday.
The generous film tax credit the General Assembly passed in 2008 is widely credited with making Georgia one of the top movie and television production states in the nation. The tax credit generated $8.55 billion in economic impact in fiscal 2022, according to a study released late last year.
But the credit accounts for about $1 billion in lost state tax revenue each year, making it by far the most expensive on the books in Georgia.
Blackmon’s bill would add nine criteria that production companies would have to meet to qualify for an additional 10% tax credit on top of the 20% base credit, raise the minimum amount companies would have to spend to earn the credit, and put new limits on the selling of credits.
“We want to make sure we streamline our tax credit to make sure we continue to get the absolute best return on that investment,” said Burns.
Suspending the tax exemption for data centers was prompted by their huge demand for electricity, which has escalated to the point that Georgia Power Co. has a request before the state Public Service Commission to increase the utility’s electrical generating capacity by about 6,600 megawatts.
“These data centers continue to use a disproportionate amount of our state’s energy,” Burns said.
Hufstetler said the Senate stands ready to take up the legislation after it gets through the House. By law, all legislation related to state tax revenue must originate in the lower chamber.
“This is all about using the taxpayers’ dollars in the most effective and efficient manner,” he said.
Jones, whose duties include presiding over the Senate, applauded the work of the tax credit panel and expressed support.
“As a result of their work, the Georgia General Assembly will have the opportunity to consider a tax reform package that lowers taxes for Georgia families and businesses, provides more transparency, and tightens requirements for several major incentive programs,” he said.