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Lawmaker: Failing to offer tax credits keeps films, TV shows out of state

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PHOENIX – Arizona is losing out on movies and television shows that could be filming here because other states are luring them with tax incentives, a state lawmaker contends.

In the process, said Sen. John Nelson, R-Litchfield Park, the state is losing out on tax revenue and jobs as well as the opportunity to capitalize on its abundance of ideal filming locations.

“I mean, you can film whatever you want and make believe it’s another part of this world in the state of Arizona,” he said.

Nelson has introduced SB 1170, which would give multimedia producers – including movies, television shows, animation studios and video game production companies – a 20 percent tax credit if they spend more than $250,000 in Arizona.

“A lot of them won’t go to states that don’t have a rebate program, and we want to be part of that competition because we have an excellent environment,” Nelson said.

A similar law was in place from 2006 until 2010 but expired as lawmakers addressed massive budget deficits. Attempts to revive the program failed during the past two legislative sessions.

The bill narrowly passed in the Senate and was scheduled to be heard Wednesday by the House Commerce Committee.

Nelson said his bill is based on successful tax-credit programs in several other states, including Louisiana, Utah and New Mexico.

New Mexico, Arizona’s biggest competitor for attracting movies and television productions, offers a 25 percent tax credit.

A 2009 Ernst & Young study assessing the financial impact of New Mexico’s tax credits found that in 2007 the program earned $1.94 in tax revenue for each dollar that paid out in incentives.

But Stephen Slivinski, senior economist with the Goldwater Institute, said offering tax credits for such productions wouldn’t help the state in the long run. Instead, it would force more taxes onto other industries and people across the state, he said.

Chris LaMont, founder of the Phoenix Film Festival and vice president of Arizona Film and Media Coalition, said the reason lawmakers haven’t revived the program is confusion. They don’t want to “put money in Hannah Montana’s pocket,” he said.

“It’s not a blank check. This money initiative is … about bringing an industry to Arizona that isn’t here now,” LaMont said. “It’s not about just putting money into a company’s pocket.”

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Cronkite News reporter Tarryn Mento contributed to this report.