St. Paul, MN – Over the next few weeks the recently announced Tax Conference Committee members will take up the omnibus tax bill (HF 991/SF 961). Conferees include Sen. Carla J. Nelson (26, R), Sen. Jeremy R. Miller (28, R), Sen. Ann H. Rest (45, DFL), Sen. Thomas M. Bakk (03, I), Sen. Bill Weber (22, R), Rep. Paul Marquart (04B, DFL), Rep. Dave Lislegard (06B, DFL), Rep. Greg Davids (28B, R), Rep. Kaohly Vang Her (64A, DFL), and Rep. Cheryl Youakim (46B, DFL). Among the many provisions they will need to negotiate is a transferable tax credit to encourage the film and TV industry, as it begins to ramp up post-pandemic production in a big way, to bring those productions and resulting jobs to Minnesota, immediately helping to revive small business and grow middle class jobs across the state.
A bipartisan Film-Production Tax Credit bill, HF 1975, authored by Iron Ranger Rep. Dave Lislegard (06B, DFL) and Rep. Greg Davids (28B, R) among others, and its Senate counterpart, SF 1986, authored by Sen. David J. Tomassoni (06, I) and Senate Tax Committee Chair Sen. Carla J. Nelson (26, R) among others, received hearings in their respective chambers. However, only the House version was included in its Omnibus Tax Bill, requiring the Conference Committee to reconcile differences between the two versions in order to create the final proposed tax bill presented for a full vote by all Legislators. The Conference Committee includes the tax credit bill authors Rep. Lislegard and Sen. Nelson, along with co-sponsors Rep. Davids, Rep. Youakim, and Sen. Rest.
The Film-Production Tax Credit bills create a transferable tax credit of up to 25% on qualified in-state expenditures for TV/film production. Minnesota appropriates zero dollars on this program as the credits are not used until a production company spends money here in the state, paying all of the applicable taxes on their spending.
“This bill will bring millions of dollars in new spending and thousands of jobs to Minnesota,” said Melodie Bahan, Executive Director of MN Film & TV. “We're grateful for the bipartisan support of legislators who understand that film and TV production can be part of our post-COVID economic recovery.”
In addition to legislative support and the support of MN Film & TV and SAG-AFTRA, both bills included supportive testimony in both chambers from labor/union leaders from IATSE Local 490, Teamsters Joint Council 32, and the Directors Guild of America. In addition, Emily Larson, Mayor of Duluth, testified about that city’s positive experience with film projects, noting that “Luring film and TV production is valuable to states and regions because production creates good jobs and injects money into the economy. [It] also brings visibility… increasing tourism and expanding sales tax for cities, counties, and the entire state.” St. Louis County recently passed a local film and TV incentive to encourage more work in the county and Duluth area.
“This bill is not just good for our members, but also for businesses around the shooting location — everything from restaurants to dry cleaners to hotels,” said SAG-AFTRA National Executive Director David White. “There are three great reasons to pass this bill: More money for the state, stimulus for the economy and more jobs for working people. And it comes with a bonus: all of it helps to create art that enriches our culture.”
Tourism sees a definite impact from local film production. A survey conducted on behalf of Visit Florida found that “22.7 percent of leisure visitors (19.5 percent of all visitors) stated that viewing a movie or television series filmed in Florida was either ‘extremely important’ or ‘very important’ in their decision to travel to Florida.” A conservative estimate from New Mexico shows the Film Induced Tourism “influenced, in whole or in part, between 5 percent and 13 percent of total visitor spending in 2014 (or between $302 million and $777 million).”
A recent report by the Motion Picture Association of America (MPAA) revealed that the highly labor-intensive film/TV industry is responsible for creating 2.6 million jobs nationwide. Two- thirds of those jobs were in indirect industries such as hospitality, transportation, and the construction/building trades. IATSE rep Brian Simpson testified that film/TV production “is like modern-day manufacturing and can only be done by real people working real middle-class jobs. Due to competition from other states [with tax incentives] and Canada, Minnesota has been exporting these jobs for at least 20 years now, but we can bring this back.” During the House hearing, Rep. Cheryl Youakim, one of several authors of HF 1975, also pointed out the benefit local economies see with film/TV production, noting that main street business owners in her district saw production dollars spent in their shops when the 2011 film “Thin Ice” was shot there.
“An incentive program like a film credit is the only way to build a thriving industry in Minnesota because so many other states and countries have implemented film credits, Sen. Tomassoni said during testimony. “Due to their success, it’s now a necessary condition for attracting large projects.”
Several states have realized substantial benefits from similar production tax credits. The first season of the Hulu series “Castle Rock,” shot in Massachusetts, created 1,026 jobs and generated $69 million in economic activity. Each $1 of tax credit generated an estimated $4.73 in economic activity in the state. During their twelve-month production period “Castle Rock” expenditures for hotels and motels, including casino hotels were $914,000. The numbers were even more dramatic in Utah, where that ratio was $14 in new state GDP for every $1 of tax credit issued. The MPAA reports that up to $250,000 per day can be introduced into local economies when a film shoots on location.
More than 30 states have recognized the economic benefits of film production to their state and offer some form of production incentive, including Montana, Georgia, Illinois, and New Mexico.
During testimony, Executive Director Bahan, highlighted how crucial the timing of this bill could be. Because so many productions were forced to shut down during the pandemic, there is an enormous backlog of shows waiting to be made. Coupled with the explosive growth of streaming viewership throughout 2020, there is now a demand for new content that outstrips current studio capacity. If history is any guide, these shows will be made in states with production incentives.
If the bill is passed, it is poised to potentially bring millions yearly into the state’s economy from producers that would begin using the incentive to produce the backlog of on hold productions. Passage of this bill will also provide an important financial incentive for many years to encourage production of all kinds in our state. Rep. Lislegard, who was cast as a local actor in the 2005 film “North Country,” shot partially on the Iron Range, noted “An incentive program like a film tax credit is the only way to build this thriving industry and allow it to be sustainable. This is truly a ‘but for’ proposal. Without a tax credit they will not come.”
For more background and information, please listen to the March 24th Clip of Rep. Lislegard’s story of working on the MN-Made film “North Country” and the economic impact it had on his life and community.
About SAG-AFTRA
SAG-AFTRA represents approximately 160,000 actors, announcers, broadcast journalists, dancers, DJs, news writers, news editors, program hosts, puppeteers, recording artists, singers, stunt performers, voiceover artists and other entertainment and media professionals. SAG-AFTRA members are the faces and voices that entertain and inform America and the world. A proud affiliate of the AFL-CIO, SAG-AFTRA has national offices in Los Angeles and New York and local offices nationwide representing members working together to secure the strongest protections for entertainment and media artists into the 21st century and beyond. Visit SAG-AFTRA online at SAGAFTRA.org.
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