Lights, cameras…action? Mississippi paid filmmakers fewer tax incentives in 2014


By Steve Wilson | Mississippi Watchdog

Mississippi spent more than $891,000 in tax incentives in 2014 for movies and TV shows filmed in the state, according to records obtained by Mississippi Watchdog.

That’s less than the previous two years — $1.2 million in 2013 and $1.4 million in 2012 — but still too much for critics, who argue such incentives provide little benefit for the buck.

The state’s film incentive program — administered by the Mississippi Development Authority — gives filmmakers a tax incentive up to $10 million on a project filmed in the state. There are also rebates available on sales and use taxes on eligible rentals and purchases.

Each fiscal year, the film rebate program is capped at $20 million and filmmakers have until June 30 to submit their applications for subsidies. The filmmakers aren’t paid immediately and once the $20 million fund is exhausted, the subsidy program is closed for the fiscal year.

“When they get their money depends on when they wrap, how long it takes them to get their request to us and how long it takes us to audit the request,” said Kathy Waterbury, director of government affairs and communications at the Mississippi Department of Revenue.

Filmmakers must spend at least $50,000 in Mississippi, have 20 percent of the production crew from the state and display the state’s film office logo in the closing credits.

Economist Matthew Mitchell, program director for the Project for the Study of American Capitalism at the Mercatus Center at George Mason University, said these incentive programs often don’t provide the economic bang their advocates claim.

“States say they will typically make money on this,” Mitchell said. “But from evidence, that’s virtually nil. The evidence that it produces revenue is not there. When you’re trying to entice a firm or a production company to move to your state, you tend to go after the firms or industries that are not likely to stick around because they’re ones that can move.

“There’s no more mobile industry than the film production industry. They leave almost no permanent economic infrastructure. They do provide value, but they don’t provide enough value to justify privileging them.”

Mitchell said there’s been several studies on the effects of film subsidies, with nine finding states get less than a dollar in added revenue from each dollar spent on subsidies and two others finding positives to the tax incentives.

Not surprisingly, the two that found benefits from film subsidies were commissioned by state film offices.

“I’m skeptical of those results,” Mitchell said.

Mississippi is one of 39 states to offer tax incentives to filmmakers and competition to lure production has intensified, especially in the South. Louisiana has a 35 percent transferable tax credit for filmmakers, while Georgia has a 30 percent tax creditAlabama and Tennessee both offer 25 percent tax credits, while Florida offers credits varying from 20 to 30 percentArkansas offers a 20 percent incentive.

Mitchell said the power to end the subsidies ultimately belongs with voters, who elected the politicians who instituted them. He cited the battle over federal earmarks as an example.

“My belief is that it is going to take some bigger institutional changes,” Mitchell said. “It would help if there would be a public backlash against the sort of things, like with earmarks. Those are very similar to this because they provide small, targeted benefits for a small, constituted group. The ‘Bridge to Nowhere’ (in Alaska) so disgusted people that earmarks became a bad word.

“Until these become a bad word, you can expect to see them continue.”

According to data provided by the Mississippi Department of Revenue, these films received state incentives in 2014:

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