North Carolina production incentives

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"North Carolina is going through a renaissance right now," North Carolina Film Office director Aaron Syrett says. "The University of North Carolina School of the Arts brought in (producer) Jordan Kerner (as dean of the film school), and now (we have) the commitment from EUE/Screen Gems to build its big studio. We're going to continue to be aggressive with the state legislature to increase the incentives."

Currently the state offers productions a refundable 15% tax credit, which helps pad the pockets of production companies but looks thin in comparison with the incentives offered by other states.

"With New Mexico's 25%, Louisiana's 25%; Michigan is at 42%; Connecticut's up to 30%; New York's up to 30% -- it's a tough landscape now and it's tough to compete," Syrett says.

Additionally, the North Carolina income tax takes a bite out of the North Carolina incentive (meaning that the net film credit can be as low as 13.97%).

In Wilmington, the response to incentive-hungry clients is to dazzle them with infrastructure and the local talent pool. "We offer a full range of studio support services, from casting to stagehands, plus state-of-the-art location equipment," says Bill Vassar, executive vp of EUE/Screen Gems Studios. But the tax credit's guaranteed presence until 2014 is "a good thing for television productions to know they can be here for five years and be secure."

On the feature front, EUE/Screen Gems has "been very good at attracting films in the $20 million-$30 million range. But to attract the larger productions that do a lot of effects, we needed to have a large stage where you could put up a large greenscreen and perhaps a tank," Vassar says. That is where the complex's new 10.5-foot-deep tank, to be built on its new 37,500-square-foot stage, comes in. "It will allow us to compete for bigger-budget films," he says. "We've got nine stages; we have a 50-acre lot -- the largest lot outside Los Angeles."

In addition to the 15% tax credit, the state also provides a sales and use tax exemption and instead charges a "privilege tax" of just 1% for film-production-related in-state purchases and rentals. The Qualified Business Investment Tax Credit Program provides a credit against state tax liability equal to as much as 25% of the amount invested.

The tax incentives and other advantages have brought in numerous productions, but there is room to move, according to Beth Petty of the Charlotte Regional Partnership. "If we can get the tax incentives up to 20% or 25%," Petty says, "we'd have more production here in the state."
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