It is not uncommon for different states to offer various tax breaks to encourage the growth of a particular industry. For example, North Carolina has offered tax incentives to filmmakers in recent years, which have caused a movie-making boom in the state. This could be about to change, though, if North Carolina legislators fail to renew the state's film industry tax credits during its current legislative session.
Legislators were supposed to decide on the measure last Friday, but decided to postpone their vote on filmmaker tax breaks to continue discussions for another two days this week.
Legislators Disagree on Filmmaker Incentives
Last week, North Carolina Governor Pat McCrory signed a budget plan that provides $10 million in grants to the film industry in 2015. Unfortunately, for filmmakers who have made the state their home, this is just a small percentage of the over $60 million in tax breaks that production companies received last year. Also, it is still unclear how the comparatively small number of incentives allotted for next year will be distributed. According to last year's rules, filmmakers have been able to receive up to 25 percent in tax credits (with a $20 millon cap) on specific types of expenses.
Proponents of the filmmaker tax breaks say that thousands of jobs have been created in the state as a result of the program and production companies spent as much as $254 million on production costs in the state in 2013 alone. Proponents say that if the tax breaks are canceled, filmmakers will take their dollars to other locations. Georgia, for example, offers a 30 percent tax credit without a cap. Opponents to the tax breaks say that the state is losing out on valuable tax money, which could be spent on teachers and on giving small businesses better tax incentives.
Businesses Can Seek Tax Help from an Attorney
Tax laws and changes to tax laws can make or break a business's ability to be profitable. Fortunately, a tax specialist or tax attorney familiar with state and federal tax laws can determine what taxes a company needs to pay and what it does not need to pay.
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