Business

Wilmington bemoans loss of film tax credit

Posted August 5

— The closing credits could soon roll on North Carolina's film industry.

The $21.1 billion state budget that awaits Gov. Pat McCrory's signature includes $10 million in grants for the film industry. That's 16 percent of the amount the state handed out in tax credits to the industry last year – or less than half of what it took to lure "Iron Man 3" to film in North Carolina.

"We needed to make some changes in our current film incentives," McCrory said Tuesday.

So, lawmakers allowed the existing tax credit, which allowed production companies to recoup 25 percent of their qualified costs in the state, up to $20 million, to expire at the end of 2014. Film industry boosters aren't quite ready to throw in the towel, but they acknowledge that, with production planning taking six months or more, the sun may have already set on "Wilmywood."

"You have those who are not going to give up the fight. You have those that are already putting their houses on the market. Then you have those that are just scared out of their minds," said Sheila Brothers, editor of The Wilmywood Daily blog.

In 2013, film projects spent more than $66 million on goods, nearly $7.5 million on services and $137.5 million in wages, officials said. State tax credits amounted to more than $61 million.

"If we don't end up with a good incentive package, the business goes away," said Johnny Griffin, director of the Wilmington Regional Film Commission.

Matt Schuler moved to Wilmington four years ago and now owns Number 9 Bakery and Lounge – but he would prefer to be an actor in town.

"What I really like about Wilmington is it has the film industry and it gives you a chance to break in to the film industry in a small market," Schuler said.

McCrory and legislative leaders say North Carolina cannot afford to continue handing out tax credits.

"Anyone who's not satisfied with how much money they got, where would you like that money to come from?" the governor asked.

Businesses in Wilmington say, however, that the state can't afford to lose the film industry.

"The money they can spend in my restaurant, that goes to my servers, to my bartenders. It goes to everybody," Schuler said.

"The last production to shoot here is called 'The Choice,'" Brothers said. "We've got a choice to make: Are we going to keep our jobs, or are we going to let them move to Georgia?"

18 Comments

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  • SaysWhoNC Aug 7, 8:26 a.m.

    As usual, Pat McCrory seems to have little idea what he's talking about. All he knows about the film industry is that he likes popcorn.

  • mmancuso Aug 6, 12:37 p.m.

    The govt, neither State or Federal should have the authority to grant some businesses tax... View More

    — Posted by mep

    On a State level, I agree. However, that would only work if ALL states were forced to not be... View More

    — Posted by matt_wood

    You miss the overall point that subsidies and tax credits are nothing more than the government... View More

    — Posted by mmancuso

    So, are you willing to give up your home mortgage tax deduction?

    — Posted by raleighboy524

    I would be all for going to a consumption tax, no deductions or credits. You're taxed on what you spend, period.

  • Dadof4girls Aug 6, 11:59 a.m.

    Stick to the facts. The salaries stated in the article did not all go to NC residents. Those salaries went out of state! In addition NC received little profit from this deal that only helped a few small percentage of the people in this state that paid taxes to give to the film industry. I say "see ya" if you are only interested in milking our state.

    Finally, stop the bashing of political people trying to help our state. If you want to have that discussion, do your homework and look at the billions given by democratic governors.

    So the discussion is not political, it is what is best for the tax paying people or NC.

  • glarg Aug 6, 10:46 a.m.

    These are credits- meaning that we are giving out more money than these productions ever paid in to us in taxes.

    They can can come in, employ people for 6 months and cash out more then they ever paid. What did the taxpayer get for our money? We didnt get manufacturing plants built. No industries get set up. Just inherently short terms jobs in an industry that is based around 1-shot corporate shells that only exist as long as it takes it complete the production and sale of a project.

    Couldn't this money be better spent attracting other employers? Google or Dell data centers for instance would generate *years* of jobs and economic activity.

  • raleighboy524 Aug 6, 10:45 a.m.

    The govt, neither State or Federal should have the authority to grant some businesses tax... View More

    — Posted by mep

    On a State level, I agree. However, that would only work if ALL states were forced to not be... View More

    — Posted by matt_wood

    You miss the overall point that subsidies and tax credits are nothing more than the government... View More

    — Posted by mmancuso

    So, are you willing to give up your home mortgage tax deduction?

  • forddp Aug 6, 10:39 a.m.

    I don't understand the logic behind this. If the tax incentives are eliminated the industry will just pack up and move to another state. How does that do anything to save this state money?
    Seems like with the loss of jobs and economic activity and taxes they do pay it will end up costing the state money.

  • dennis8 Aug 6, 9:42 a.m.

    If it isn't coal, oil, or gas McCory and company are not going to try and get those jobs.

  • mmancuso Aug 6, 9:38 a.m.

    The govt, neither State or Federal should have the authority to grant some businesses tax... View More

    — Posted by mep

    On a State level, I agree. However, that would only work if ALL states were forced to not be... View More

    — Posted by matt_wood

    You miss the overall point that subsidies and tax credits are nothing more than the government redistribution of wealth. The benefits are for the recipients, not for those paying. Jobs created with tax dollars are an illusion of prosperity.

  • DURHAMBULL Aug 6, 9:28 a.m.

    He had to take the tax credits away from the film industry so he could have a bigger coffer to hand over to the fracking industry. Don't believe a word that snake says.

  • mep Aug 6, 9:25 a.m.

    The govt, neither State or Federal should have the authority to grant some businesses tax... View More

    — Posted by mep

    On a State level, I agree. However, that would only work if ALL states were forced to not be... View More

    — Posted by matt_wood

    Health and technology "subsidizes" are also a massive waste. ANY product worthy of investment will in fact find seed money among the countless private equity funds.

    Here is a short list of green energy taxpayer funded "investment" losses.
    http://dailysignal.com/2012/10/18/president-obamas-taxpayer-backed-green-energy-failures/

    Corrections are listed... but you get the idea.

    So how many people now work for Solyndra... and how much taxpayer money did we give them? LOL!

    ALL States and the Federal govt should be prevented by law (equal protection) from offering taxpayer subsidizes or tax credits. Period. Fact is, the entire tax code is corrupted beyond repair.

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