The state tax credits that have spurred the exponential growth of Georgia’s film industry will get added scrutiny under legislation Gov. Brian Kemp signed into law Tuesday.
House Bill 1037, which the General Assembly passed during the last week of this year’s session, will require all film productions located in Georgia to undergo mandatory audits by the Georgia Department of Revenue or third-party auditors selected by the state agency.
It also tightens rules governing how film companies transfer or sell unused tax credits to other businesses, a common practice for production groups that conduct part of their movie-making work outside Georgia.
The economic impact of film and TV production in Georgia has soared from $93 million in direct spending in fiscal 2007, the year before lawmakers adopted the film tax credit, to a peak of $2.9 billion in fiscal 2019 before dipping to $2.2 billion when the coronavirus pandemic ground production to a halt during the fourth quarter of the last fiscal year.
However, two critical audits released in January put the tax credit’s supporters on the defensive, spurring efforts to bring the program under tighter control. The reports found the program has been poorly managed and called into question the accuracy of the fiscal impact estimates.
The bill, sponsored by state Rep. Matt Dollar, R-Marietta, passed both the Georgia House and Senate overwhelmingly.
Dollar’s legislation was among a flurry of bills Kemp signed Tuesday as he neared the deadline for signing the measures lawmakers passed during the General Assembly session that ended in June. The governor has until Wednesday – 40 calendar days after the session’s conclusion – to sign or veto bills.
Also on Tuesday, Kemp signed legislation banning utilities from burning wooden railroad ties treated in creosote to produce electricity. House Bill 857, sponsored by Rep. Alan Powell, R-Hartwell, was sparked by complaints from residents in two Northeast Georgia counties who have been pestered over the past year by foul smells and water pollution emanating from two new biomass plants.