The North Carolina Senate plans to deliberate over a bill Wednesday that would reduce the franchise tax rate base and expand film and entertainment grants in North Carolina.
If passed, Senate Bill 578 will change the franchise tax rate from $1.50 per $1,000 to $0.96 over the next two years. Also, it will remove an additional method of calculating a corporation's franchise tax base. What's more, the bill will raise the qualifying limit for the state’s Film and Entertainment Grant Fund.
The Senate will have the second reading of the bill Wednesday afternoon. On Tuesday, Gov. Roy Cooper also announced a new effort to try to develop the film industry in the state. He has launched the Governor’s Advisory Council on Film, Television and Digital Streaming.
“This advisory council will play a critical role in helping the industry flourish, which creates good-paying jobs right here in North Carolina,” Cooper said in a statement.
Film jobs in North Carolina have increased in 2019, according to Cooper’s office. Nearly 11,000 jobs in the field have become available after a history of declining rates. Production spending has also increased to $165 million so far for the year.
The Film and Entertainment Grant Fund was created by North Carolina's Department of Commerce to promote the production of television shows, movies, commercials and other entertainment projects.
The grants are currently offered to production companies that have expenses that range from at least $3 million to $250,000. The bill will decrease the expense threshold to begin at $1.5 million for theatrical productions and $500,000 for movies and TV shows. Commercial expense limitations will remain the same at $250,000.
The bill will also extend the cap on the grant from $12 million to $15 million per season for a TV series.
The drop in the minimum expense requirements has received prior bipartisan support.
The provision was included in both the Republican-authored budget proposal and the Democrat governor’s budget proposal.
The first part of SB 578 also makes North Carolina a more business-friendly state.
The bill will reduce the franchise tax rate to $1.29 in 2021 and to $0.96 by 2022. The provision excludes electric power companies, which will continue to be subjected to the franchise tax rate of $1.50 per $1,000 until 2026.
If the legislation becomes law, the current appraisal method for calculating a franchise’s tax base at 55 percent will be removed starting Jan.1, 2021.