September 20, 2023

Georgia Strike Costs = Qualified Production Expenditures

Georgia is in the news again and it’s all positive!

In a press release issued last week, the Georgia Department of Economic Development celebrated 50 years of the Georgia Film Office (“GFO”) and boasted that the film and television industry spent $4.1 billion in the state during fiscal year 2023. Between July 1, 2022 and June 30, 2023, Georgia hosted 390 productions broken down as follows:

• 31 feature/studio films,

• 55 indie films,

• 241 television and episodic projects,

• 40 commercials and

• 23 music videos.

Furthermore, the press release touted the construction of more studio infrastructure and encouraged filmmakers to leverage the GFO’s plethora of resources. This is all good news for the “Hollywood of the South” and its stakeholders.

But the good news doesn’t stop there. In a previous #BankableBites, I discussed the notion that producers should investigate whether each state will treat strike/holding/hiatus costs as a qualified production expenditure for the jurisdiction’s film tax credit program. Coincidentally, the Georgia Department of Revenue (“DOR”) recently verified, in its first Policy Bulletin issued this calendar year, that “interim production period expenditures qualify for the film tax credit provided the production company continues filming in Georgia and can only be claimed for the qualifying year in which the production company continued filming in Georgia” (emphasis added).

Policy Bulletins don’t have the force or effect of law and is not binding on the public. In Georgia, a Policy Bulletin is intended to provide guidance to the public and to Department personnel. It is a written statement issued to apply principles of law to a specific set of facts or a general category of taxpayers, superseding all conflicting documents and oral directives previously issued by the DOR. They represent the Department’s position on a given matter and is binding on DOR personnel until superseded or modified by a change in statute, regulation, court decision or a subsequent Policy Bulletin. Accordingly, filmmakers, financiers and stakeholders can rely on this Policy Bulletin and use it to support the tax position to qualify its strike holding costs for the Georgia Film Tax Credit.

With the aforementioned announcements and clarity surrounding strike costs, Georgia has continued to position itself as filmmaker-friendly and ready-to-do-business when the 2023 combined strikes come to an end!