(The Center Square) – Two months after state auditors highlighted shortfalls in Georgia’s Film Tax Credit program, lawmakers have approved a bill that would tighten the requirements for the incentive.
In January, state auditors reported Department of Economic Development officials who administer the program inflated the economic impact of the program by using calculation metrics that doubled projections. They also found the film tax incentives were issued to more than 80 ineligible productions, costing taxpayers $60 million.
“This is a process improvement bill,” said Rep. Mark Dollar, R-Marietta, the bill’s sponsor.
Georgia’s film tax credit gives a 20 percent tax incentive to production companies that spend at least $500,000 on selected projects in the state. Companies that promote the state in their work also get an additional 10 percent credit.
House Bill 1037 would hold the additional 10 percent until the production is distributed. It also reduces the carry forward period for the credits from five years to three years. Hoping to attract soccer's World Cup to Georgia, lawmakers extended the credit to certain sporting events.
The House voted 156-10 on Thursday to approve HB 1037, which also would require all productions claiming credits to be audited by an independent auditor or the Department of Revenue by Jan. 1, 2023. Productions applying for credits that are $1.25 million and over would be subject to audits starting Jan. 1, 2021.
Audits under the current policy are voluntary.
“The industry has changed. Georgia has changed,” Dollar said. “This is one of the areas that needs addressing.”
The bill will now heads to the Senate for approval.