There have been a few articles written about this issue, mostly along the lines that it's a stupid exemption and that states should repeal it. I don't disagree. I have the sense that politicians like to grant these exemptions because they get to rub shoulders with Hollywood types, and they like to brag about how they got the latest Transformer movie made in their state. But according to what I've read, the economic and long-term job impact of movies doesn't seem to justify the giveaways that states offer.
I recently saw one state talk about $20,000,000 in credits given in one year. But they could only point to about 1000 long term jobs created, and they weren't even full-time jobs. That's $20,000 per job. I'm not sure that money couldn't have been better spent. But hey, what do I know?
States offer a couple of different types of movie exemptions for production materials and equipment:
1. The purchases are exempt from tax at the time of purchase and the producers present exemption certificates, etc. to the seller
2. The producers pay the sales and use tax and then get a refund, rebate or credit
3. There aren't any sales and use tax exemptions, but there income, franchise or occupation tax credits. Some states even offer grants.
For many states, these exemptions are conditional on the amount spent in the state or the money available to the state to fund the exemption.
As of this date (January 19, 2012) these states have some sort of sales and use tax exemption (item 1 or 2). If their special treatment is in the form of item 3, then I won't list it here. And some cities may do special things that won't be shown here either. Remember, this is just for education. Check these out yourselves to get more details.
Alabama
California
Connecticut
Florida
Georgia
Idaho
Kentucky
Louisiana
Maryland
Massachusetts
Mississippi
New Jersey
New Mexico
New York
North Carolina
Oklahoma
South Carolina
South Dakota
Texas
Utah
Washington
Remember, these are only for sales and use tax exemptions and there are details you need to check!
So get out there and make that movie. Tom Hanks is waiting for your call!
The Sales Tax Guy
http://salestaxguy.blogspot.com
See the disclaimer - this is for education only. Research these issues thoroughly before making decisions. Remember: there are details that haven't been discussed, and every state is different. Here's more information
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