Hollywood’s Subsidy: Rethinking the Design of Georgia’s Film Tax Credit
Enacted in 2008, the Georgia Entertainment Industry Investment Act (GEIIA) aimed to make Georgia into the “Hollywood of the South” (Freeman, 2024). By offering up to a 20% tax credit to film and TV production companies that spend at least $500,000 in Georgia, and an additional 10% credit for productions that display a “Made in Georgia” peach logo (Georgia Department of Economic Development, n.d.), Georgia has been able to transform itself into one of America’s premier production destinations. These tax credits are also transferable: production companies have the option to sell unused credits to Georgia taxpayers or businesses. Georgia has emerged as one of America’s premier production destinations, ranking first among all states for film and television production ahead of California and New York in 2024 (Business Facilities Staff, 2024). The industry has created tens of thousands of jobs for local vendors, crew members, and small businesses across the state (Georgia Department of Audits and Accounts, 2023). But as Georgia now issues over $1 billion annually in film tax credits, projected to grow to $1.28 billion by FY 2028 (Georgia Department of Audits and Accounts, 2023), the program’s structural flaws (inflated multipliers, nonresident wage leakage, and uncapped fiscal exposure) reveal a policy that is leaving value on the table, one that targeted reforms could fix without dismantling what works.
The GEIIA’s core mechanisms are logical. Large-scale productions create direct employment for Georgia residents across hundreds of crew and support roles, local vendors benefit from the industry's sustained production activity, and over time the industry has built durable infrastructure (soundstages, post-production facilities, and training pipelines designed to outlast any one project). Any honest assessment of the GEIIA has to acknowledge the policy’s long-term gains and how these gains further benefit Georgia’s residents.
However, Georgia’s own internal accounting raises serious questions about whether the film tax’s benefits have been systematically exaggerated. According to a 2020 audit, Georgia’s Department of Economic Development used a 3.57 multiplier to report the credit’s economic impact, meaning each dollar of subsidy generated $3.57 in broader economic activity (Georgia Department of Audits and Accounts, 2020). However, this figure is almost double the 1.84 multiplier that Georgia’s own State Auditor independently calculated (Georgia Department of Audits and Accounts, 2020). The stark gap between these two figures matters because the higher number is being used to justify the policy’s growing scale. Since the agency responsible for promoting the film industry calculates a return nearly twice as large as the independent auditor, the discrepancy warrants scrutiny. The same independent audit estimated the state’s fiscal return on investment at just 10 cents per dollar; this means Georgia loses roughly 90 cents on every dollar it issues in film tax credits (Georgia Department of Audits and Accounts, 2020).
Part of this discrepancy more likely pertains to how wages flow through Georgia's economy. According to the Georgia Department of Audits and Accounts, 53% of wages flow to nonresidents (i.e., principal actors, directors, and other high-earning talent who live and spend outside of Georgia) meaning that these incomes are circulated and taxed in other states’ economies rather than Georgia’s (Georgia Department of Audits and Accounts, 2022). The remaining 47% circulates through Georgia households and businesses. When the majority of the highest-paying jobs go to workers who leave the state as soon as filming ends, the economic cycle the subsidy was intended to produce is broken before it begins.
The credit’s transferability also raises questions pertaining to the policy’s design and effects. About 97% of film tax credits are transferred or sold as opposed to being used by the production companies directly, most of which lack sufficient Georgia tax liability to use them (Georgia Department of Audits and Accounts, 2022). Tax credit transferability is a common and legitimate feature of state tax credit programs; it has been used in historical preservation, renewable energy, and other sectors and allows the credit to function even for companies without a permanent Georgia presence. However, it also means that a large share of the policy’s fiscal cost ends up reducing tax liability for credit purchasers as opposed to funding production activity.
The large transferability figures, inflated multiplier, and nonresident wage concentration do not make GEIIA a failed program, however. They suggest that its current structure is leaving value on the table: for the state’s fiscal base, for Georgia workers, and for the communities that host productions but may not be receiving as much of an economic benefit as the headline numbers suggest.
Several targeted reforms have the potential to address these inefficiencies without threatening the industry Georgia has spent nearly two decades building. First, a cap on annual credit issuances would limit the program’s open-ended fiscal exposure while still offering strong production incentives. Several states with competitive film industries, notably New York (operating under a $700 million annual cap as of 2025) and California (operating under a $750 million cap as of 2025), operate under their respective credit caps while maintaining among the most competitive production destinations in the country (Empire State Development, n.d.; California Film Commission, n.d.). Because Georgia's program is currently uncapped, it is distinguishable from almost every comparable state program and leaves its fiscal cost without a ceiling. In fact, the Georgia legislature has already recognized this problem. In February 2024, the Georgia House passed HB 1180 by a 131-34 vote (Williams, 2024), which would have capped Georgia’s annual credit transfers to 2.5% of the governor's revenue estimate (approximately $900 million) (Goldsmith, 2024). However, as the bill passed to the Senate, the Finance Committee rewrote it to exempt productions filmed within the state's largest studio facilities (Maddaus, 2024). The House and Senate were never able to reach an agreement and, inevitably, the session ended without any reform passing. The fiscal concerns that motivated HB 1180 did not disappear when the bill did, and a durable reform package would need to go further than the bill proposed: stronger local hiring requirements would address the wage leakage the audit identified, ensuring that more of the economic activity the credit generates actually flows toward Georgia residents as opposed to traveling talent. Independent verification tied to actual economic outcomes, rather than the agency’s own multiplier, would give the legislature an honest baseline for evaluating the program over time.
From Burt Reynolds filming Smokey and the Bandit on Georgia’s backroads in the 1970s to Stranger Things using Atlanta as a film backdrop (Georgia Public Broadcasting, 2023), storytelling has become woven into the cultural fabric of Georgia. The question is not whether to support the industry but whether the policy sustaining it is designed well enough to ensure Georgia captures its fair share of the returns. The evidence suggests it is not. The gap between what the GEIIA promises and what the audited report shows is wide enough to call for reform, and fixing the policy’s design is not a retreat from Georgia’s ambitions as an entertainment hub. It is how the state makes good on those ambitions.
Edited by Caitlin Williams
References
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