JEFFERSON CITY, Mo. – A bill which seeks to modify a tax credit for in-state film production products, sponsored by Rep. Kathy Swan, R-Cape Girardeau, is set for perfection in the House.
Recently, Gone Girl, a feature film from 20th Century Fox studio starring Ben Affleck, was largely filmed in Swan’s district in 2013, receiving the tax credit before it sunsetted the same year.
The filming of Gone Girl in the area is what ultimately lead constituents to request Swan sponsor the bill.
“We’ve seen the value of the financial impact to the community,” Swan said.
Swan shared statistics of the boost which totaled $7.87 million to the economy around Cape Girardeau. The state redeemed $2.36 million in tax credits – 30 percent of the overall spend.
Swan stressed wisdom shared with her from Cole Payne, CEO & Partner of Travers Media, who said the difference between an individual coming to Missouri as opposed to a filmmaker is that an individual rents one hotel room and pays for his/her meals, whereas a filmmaker rents out the entire hotel and hires a local caterer for possibly hundreds of meals.
Of the 5 weeks of filming in the Cape Girardeau area, 139 Missourians were hired, 7,000 hotel nights were secured – totaling over $600,000 spent on lodging and office space, $250,000 was spent on transportation and fuel, $180,000 spent on security, almost $150,000 was spent on catering, over $160,000 was spent on building supplies, and over $170,000 was spent on furniture and props from local businesses. Since the film left, tourism has brought a lingering boost to local businesses featured.
Previously, taxpayers were allowed a tax credit for up to 35 percent of the amount of qualifying expenses in a qualifying film project. Under Swan’s bill, a taxpayer can claim the credit equal to 20 percent of qualifying in-state and out-state expenses. An additional 5 percent can be earned if more than half of the production is filmed in Missouri. The bill also requires a Department of Economic Development designation to appear in the film to qualify for the credit.
Missouri’s current tax credit for film projects expired in 2013, which bill supporters say takes Missouri out of the competitive filming market. Supporters laud Missouri as having diverse scenery and architecture, making it a dynamic choice for filmmaking, but a currently non-competitive option because of other states’ tax credit offerings. Supporters are also concerned that Missouri will miss out on revenue from filming and related tourism without the credit that filming attracts.
Filmmakers, studios, tourism and business groups — such as the Greater Kansas City Chamber of Commerce and the Associated Industries of Missouri — testified in support of the bill.
Missouri Alliance for Freedom and libertarian think-tank the Show-Me Institute and the have expressed opposition.
“First and foremost I don’t think that government subsidies quantify as economic development,” said Ryan Johnson of the Missouri Alliance for Freedom. “Missouri needs to look at a long term free market based economic development package of legislation that will make our state more attractive to industries across the board. Specifically, with regard to film tax credits, they do not pay for themselves and fail to provide a positive return on investment to the state. This is not the proper role of government. True economic development occurs when you have conditions that apply equally to all businesses regardless of size and industry. Instead of piecemeal subsidies for various industries we should look at an overhaul of the entire tax code. ”
Michael Rathbone from the Show-Me Institute testified in opposition of the bill – which was voted out of the Standing Committee on Economic Development and Business Attraction and Retention by a vote of 9 to 1 and from the Select Committee on Commerce by a vote of 9 to 0 – saying the credit only brings temporary boosts and rarely benefit Missourians, as non-Missourians make up the vast majority of filmmakers.
The provisions of this bill will expire six years after November 28, 2015.
Rachael Herndon was the editor at The Missouri Times and also produced This Week in Missouri Politics, published Missouri Times Magazine, and co-hosted the #MoLeg podcast. She joined The Missouri Times in 2014, returning to political reporting after working as a campaign and legislative staffer.
Rachael studied at the University of Missouri – Columbia. She lives in Jefferson City with her husband, Brandon, and their two children.
