Advocates want Missouri's film tax credit program reauthorized

As filming of 20th Centry Fox's "Gone Girl" winds down, Cape Girardeau can boast it has hosted a major Hollywood production for several weeks.

In public interviews, some big names involved with the production of "Gone Girl" have praised the city for its geographical features and downtown attractions in serving as a stand-in for North Carthage, the fictional Missouri town on the Mississippi River that serves as a primary setting for the film and for Gillian Flynn's "Gone Girl" novel.

Other considerations such as accessibility and the ability to house a production crew also worked in Cape Girardeau's favor, but another factor leading up to 20th Century Fox's decision to film "Gone Girl" in Missouri might have been the tax incentives offered to attract film productions to the state.

Onlookers watch from the steps of the Common Pleas Courthouse as a scene from the feature film “Gone Girl” is shot inside The Bar, at the corner of Spanish and Themis streets Monday in downtown Cape Girardeau. (Laura Simon)

Advocates of the tax incentives would like for them to become open-ended, which they say could bring a new source of economic growth to the state.

The incentives are state tax credits through the Film Production Tax Credit Program, which, since 1999, has offered credits to film productions for up to 35 percent of their in-state expenditures. Any film-production company with an expected in-state expenditure budget of at least $100,000 for films longer than 30 minutes, and at least $50,000 for films shorter than 30 minutes, is eligible to apply for the tax credits. Only in-state expenditures necessary for the production of the film may be claimed, such as equipment rental, lodging and property rentals and payroll expenditures for Missouri residents. The entire tax-credit program is capped at $4.5 million.

Amy Susan, communications director for the Department of Economic Development, said in an email to the Southeast Missourian that 20th Century Fox had applied for film production tax credits for the filming of "Gone Girl" in Missouri.

"Once they complete production, they will need to submit documentation of their expenditures," Susan said. "If approved by the department, the production company is eligible for up to $2.5 million in tax credits."

Past film productions in Missouri have also benefited from the tax credit program, Susan said. "Killshot," which was partially filmed in Cape Girardeau in 2006 and starred Thomas Jane, Mickey Rourke and Diane Lane, was issued tax credits worth nearly $340,000. The 2009 film "Up In The Air," which starred George Clooney and was primarily filmed in the St. Louis area, received more than $4.1 million in tax credits. "Winter's Bone," a 2010 motion picture filmed in the Missouri Ozarks and starred future Academy Award winner Jennifer Lawrence, received tax credits totaling almost $260,000.

In 2012, there were 296 motion picture and sound-recording productions in Missouri that employed more than 3,400 people, according to Susan.

But while it may seem that Missouri is offering a good deal to attract filmmakers, other states such as Louisiana are leaving the Show Me State on the cutting-room floor.

Rich Lynn waits for a photo op of crew members setting up equipment as a scene from the feature film “Gone Girl” is shot inside The Bar, at the corner of Spanish and Themis streets Monday in downtown Cape Girardeau. (Laura Simon)

"Louisiana has really done a lot with its incentive program," said Chris Stelly, executive director of the Louisiana Office of Entertainment Industry Development. "Our incentives are stable and reliable."

Stelly said Louisiana's tax incentives include a 30 percent tax credit for a film production's in-state expenditures with an additional 5 percent credit for payroll expenditures to Louisiana residents. While that sounds comparable to Missouri's incentive program, a big difference is that Louisiana's program isn't capped at any set amount.

"I think caps can be a deterrent," Stelly said. "Film companies sometimes decide that a state with a program cap isn't a reliable option. They don't want to be on a first-come, first-served basis when it comes to getting tax credits. In Louisiana, they don't have to worry about that."

According to Stelly, Louisiana certified about $218 million in film production tax credits in 2012 while film production companies spent more than $717 million in the state. "The film industry also supported over 14,000 jobs in 2012," Stelly said. "A big reason for that are the tax incentives that bring production companies here. It's something I would like to see continue."

Another state that is reaping the benefits of film production is Georgia.

Amy Dowdy waits for her next shot from the Common Pleas Courthouse as a scene from the feature film “Gone Girl” is shot inside The Bar, at the corner of Spanish and Themis streets Monday in downtown Cape Girardeau. (Laura Simon)

"We have announcements for 33 film productions in place right now," said Lee Thomas, director of the Georgia Film, Music and Digital Entertainment Division.

Thomas said Georgia's tax incentives have played a major role in attracting film productions.

"But it's not only the incentives," she said. "We have diverse locations and the world's busiest airport in Atlanta to accommodate filmmakers."

The highlights of Georgia's tax incentives are a 20 percent tax credit with a minimum of $500,000 spent on qualified production and postproduction expenditures, with an additional 10 percent tax credit if a production company includes a Georgia promotional logo in the qualified feature film. The Georgia incentive program, as with Louisiana, is uncapped.

"We don't think caps are necessary," Thomas said.

Film productions in Georgia generated an economic effect of $3.1 billion during 2012, according to information provided by Thomas. Georgia also saw a record investment by the entertainment industry of almost $880 million, with 333 feature films, television movies and series developed in the state.

Organizations such as the Missouri Motion Media Association would like to expand the current tax-credit program so the state can become more competitive.

"I can't say where Missouri is when ranked with other states, but I know we're not at the top," said Dr. Jim Dufek, Missouri Motion Media Association board member and professor of mass media at Southeast Missouri State University.

Dufek said capping the state's tax credit program at $4.5 million restricts what can be offered to potential film productions.

"We'd love for Missouri's tax credits to be open-ended," he said. "We believe that it can have a positive impact on long-term economic growth that's currently not being taken advantage of. But realistically, we're not sure that can happen. At the very least, we don't want to see the program lose any money."

To that end, Dufek said the association has a lobbyist in place who will "educate" lawmakers on the need for more film production tax credits.

"We've been lobbying for a while now," he said. "Some lawmakers are supportive, some aren't."

The tax credit program has a sunset date of Nov. 28, which marks the period of time the Legislature has to reauthorize the program before it reaches its termination date Sept. 1. The Legislature doesn't meet again for its regular session until next year.

State Rep. Kathy Swan, R-Cape Girardeau, said she would have to consider the program's statewide effect before she voted for reauthorization.

"Being from Cape, the filming of 'Gone Girl' has been such a great experience," Swan said. "I would support the extension of the program if it's shown to have a positive impact. I would have to see the numbers first."

State Sen. Wayne Wallingford, R-Cape Girardeau, said he was inclined to vote against reauthorizing the tax-credit program.

"I don't think the return on our investment in the program is great," Wallingford said. "You have to look at it like you're running a business. If there's not enough of a product being bought, you get rid of it."

klewis@semissourian.com

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