Tax Credits in The Film Industry: Friend or Foe? An Analysis of The Cost-Benefit Relationship Between Tax Incentives and the States That Provide Them

Author

Virginia Anne Gamble

Date of Award

2013

Document Type

Undergraduate Thesis

Department

Accountancy

First Advisor

Tonya Flesher

Relational Format

Dissertation/Thesis

Abstract

Today, tax incentives play a major role in the film industry. The primary research question of the thesis is the cost-benefit relationship between these incentives and the states that provide them. A further research question is how states can remain competitive amongst one another while maintaining this cost-benefit relationship. A review of scholarly articles, from economists and film office officials, reveals arguments for and against the incentive programs. Researching the history of these tax incentives in the United States also provides a basis for an opinion on the potential future incentives may have in the film industry. Many economists believe that the film tax incentives are too generous to sustain. Instead of increasing revenue and creating jobs, they feel the incentives are losing money and providing opportunities for scandal; however, it is possible that these incentives can have a positive impact on the states’ economies. Although the incentives are necessary to attract filmmakers, states cannot solely rely on them to pique filmmakers’ interests. States that will continue to attract business in the film industry are those that provide some sort of infrastructure (such as trained crew members and production equipment) in addition to the incentives. Climate also plays a strong role in a filmmaker’s location decision. States must have a balance of all of these benefits in order to win over film producers. In the future, limits on the incentives given will be essential in order to maximize the states’ benefits and do what they were designed to do: attract filmmakers.

Recommended Citation

Gamble, Virginia Anne, "Tax Credits in The Film Industry: Friend or Foe? An Analysis of The Cost-Benefit Relationship Between Tax Incentives and the States That Provide Them" (2013). Honors Theses. 2009.
https://egrove.olemiss.edu/hon_thesis/2009

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