Lights, camera, bad deal: Georgia’s film subsidies never paid off

Hailed the Hollywood of the South, Georgia’s once-soaring film industry is crashing down to Earth. Last fiscal year, 245 productions were filmed in the Peach State, which resulted in $2.3 billion in spending, but that pales in comparison with 2022 — Georgia’s zenith — when there were 412 productions that drove $4.4 billion in spending.

It is not a mystery where these TV and film productions are going or why. Movie makers are pursuing ways to film cheaper. Many are going abroad where labor costs are lower and they receive sweetheart tax deals, although some of the tax credits are similar to what they can secure in the states.

Even if they remain in the U.S., there are states willing to dole out even more generous handouts than Georgia is willing to offer, and that’s OK. Given the state’s experience, taxpayers should be relieved that films are fleeing for more profligate pastures.

Georgia’s dysfunctional relationship with tax credits for film and TV productions began about 20 years ago and gradually morphed into a boondoggle.

“Studios can receive credits equal to 20% of production costs incurred in-state, plus an extra 10% if they promote Georgia by putting its peach logo in the movie’s credits,” according to The Wall Street Journal. “The credit amounts to free cash. Most studios owe little in local income taxes. Instead, they can sell the credits to Georgia taxpayers.”

This was supposed to lure productions here, spur economic activity and presumably result in increased tax revenue, but out-of-state film companies benefited more than Georgia. The Georgia Department of Audits and Accounts disclosed in 2020, “The film tax credit is not designed to incentivize hiring residents over nonresidents; it provides the same credit regardless of workers’ residency. While Georgia residents held most of the jobs (80%) associated with the credit, most wages (53%) were paid to nonresidents.”

Meanwhile, a 2021 study found, “88% of companies participating in the program are based outside of Georgia.” That’s not all.

“Auditors estimated that every dollar the state awarded studios — $5.2 billion between 2015 and 2022 — returned only 19 cents in tax revenue, an 81% loss,” the Journal recently reported.

That is a terrible return on investment, but if Georgia is willing to maintain wasteful programs, could they at least make them aid Georgians instead of deep-pocketed out-of-state film companies?

Proponents of this subsidy are certainly quick to point out inflated economic impact numbers and how the incentives brought many hundreds of productions here. That made Georgia the film capital of the country for a period, but that is not necessarily a legitimate argument for perpetuating the tax incentives.

“Tax credits have increased filming in Georgia, which is not surprising,” the Atlanta Journal-Constitution pointed out. “If the state subsidized 30% of the cost of manufacturing toilets, Georgia would be the toilet capital of the world. The question is if there are better uses for [the lost tax revenue].”

The economic impact stemming from these subsidies is another one of the proponents’ supporting arguments, although it is likewise fraught. The state multiplies whatever amount of money filmmakers spent on production in Georgia by 3.57 and asserts that the resulting number is the true economic impact. The only problem is bureaucrats don’t really know where that number comes from or the math behind it.

To the Georgia General Assembly’s credit, they have worked to curtail these tax credits, and some members not-so-secretly want to abolish them outright. Doing so would be a tall order, but as filming wanes in Georgia, lawmakers may want to restore Georgia’s place as the South’s filmmaking capital, especially following some high-profile departures.

“Marvel has left Georgia’s market — its last movie filmed there was 2025’s ‘Thunderbolts’ — and shifted its massive productions to the United Kingdom, where labor and production costs are cheaper,” Georgia Public Broadcasting noted. “Streamers like Netflix are also increasingly filming abroad, while producing fewer shows in general. Other states, including California and Texas, have upped incentives to compete with Georgia’s tax credits.”

It’s not just state governments that have engaged in economic warfare to secure filming. President Donald Trump has even attempted to dissuade filming abroad. He called for 100% tariffs on films produced overseas, but it seems that has done little to influence film companies’ decisions.

Like many Georgians, I think it is neat when a film is produced locally, and I am sympathetic to the Georgians who work in film and are struggling financially. However, as a matter of public policy, providing lavish tax credits to filmmakers has been a failure. 

That’s why many Georgians will shrug when they hear about the Georgia film industry’s decline.

Marc Hyden is the senior director of state government affairs at the R Street Institute. You can follow him on X at @marc_hyden.