JLF’s Becki Gray weighs in on why the film industry loves the N.C. taxpayer and why legislators should end this special-interest tax break now.

North Carolina offers cash payouts to the film industry on 25 percent of what they spend. They’re called tax credits, but in most cases the N.C. Department of Revenue cuts filmmakers a check for doing business in North Carolina. The film credit will expire at the end of the year.

Over a quarter of U.S. states do not give any tax breaks to the film industry. Those with incentive programs are doing the math and are repealing or rejecting giveaways to the film industry.

Hollywood movie moguls cashed in $86 million worth of credits in 2013 here in North Carolina. (To put things in perspective, $108 million would cover the teacher pay raise the governor has proposed. Film tycoons or teachers? Hmmm.) In 2012, the film industry got $62.3 million and over $30 million in 2011.

The return on that “investment”? Only 19 cents for every dollar given away in tax credits to the film industry. Jobs? A 2011 report by the General Assembly’s staff says only 55 to 70 jobs were created that year and had the money been used instead for an across-the-board tax cut, five times that number of jobs would have been created. The federal Bureau of Labor Statistics reports 792 film-related jobs in North Carolina in 2012.

North Carolina started its film giveaway program in 2005, expanding it in 2009. In 2010, Gov. Bev Perdue signed into law an exemption for film companies from paying the 6.9 percent corporate tax on their “earnings” to ensure they got the full 25 percent refund. New conservative legislative leaders set the film credit to sunset on Jan. 1, 2015.

The film industry has launched a full-out attack to hold on to the credits. They paid for a (now thoroughly debunked) report touting the economic benefits of the giveaway. “Compromises” include a nonrefundable credit, something tied to capital investments and covering only real films.

And they are going after local incentives as well. One proposal would authorize local governments to exempt film companies from paying local occupancy taxes. This is the worst of special treatment for special interests.