Democratic Sen. Lonnie Randolph has kicked off what’s expected to be a multi-year effort to revive Indiana’s tax credit for film and TV production.
Indiana’s tax credit expired at the end of 2011, and the newly formed Indiana Media Production Alliance hopes to restore it. Glenn Pratt, president of the Indianapolis-based organization, said he didn’t expect to see any legislation pass during this year’s abbreviated session but will certainly get behind Randolph’s bill.
"If you look at various other states, there is huge potential for building a new industry in Indiana," Pratt said. "This is a long-term endeavor."
Senate Bill 39 provides for a tax credit of as much as 40 percent on production expenses in an economically depressed city or county, and 35 percent elsewhere. The previous credit was 15 percent.
The bill caps the state’s loss at $2.5 million per fiscal year, but the Legislative Services Agency predicted the fiscal impact would be much less, around $240,000 a year after 2015, based on claims under the previous credit.
The credit was used three times between July 2008 and December 2011, according to the Indiana Economic Development Corp.
Randolph said he’s been interested in tax credits for filmmaking since reading an article about the economic impact of productions in Illinois and Chicago. “It’s an economic development tool is what it is,” he said.
Illinois offers a 30-percent tax credit on qualified film-production expenses, as well as an additional 15-percent tax credit on salaries for individuals who live in economically disadvantaged areas. The Illinois Film Office says that the movie and TV industries have spent more than $1 billion in the state since the tax credit was enacted in 2004. That includes $184 million spent in 2012, which saw the production of such TV shows as "Chicago Fire," "Boss" and "Mob Doctor."
One side benefit of media productions, Randolph believes, is bringing attention to Indiana communities as good places for other businesses. “Maybe some location will get discovered,” he said.
Legislative leaders have been less enthusiastic about the credit. Randolph filed a similar bill last year, and it didn't get a hearing. His current bill has been referred to the Senate Tax and Fiscal Policy Committee.
Tax credits are very influential in producers’ decisions about where to shoot, because their investors want them to save as much money as possible, said Pratt, a freelance production coordinator who works mainly on commercials. Without the credit, crews that come to Indiana usually do so at the urging of Hoosiers who have personal ties to certain locations, he said.
That was the case for Newburgh native Michael Rosenbaum, who shot his feature film “Back in the Day” in the Evansville suburb in 2012 because he grew up there. The movie opens in theaters Jan. 17.