States can use taxes for more than revenue.
Our story begins when NYC lost the $79 million that Law & Order generated annually because NBC cancelled the show. Just feeding the actors for 14 years meant $1.5 million to David’s Gourmet Catering and Craft Service. One person on the show’s design staff said, “We spent an enormous amount of money in Saks Fifth Avenue and Barney‘s, dressing the lawyers.”
The show hired actors, camera operators and costume designers. They needed hair and make-up stylists and local carpenters. People stayed in hotels, they ate at restaurants, they drank at bars. They purchased duct tape and boom microphones. Broadway actors could supplement their incomes with a one-day acting role. The NYC Commissioner of the Mayor’s Office of Film, Theater and Broadcasting said Law & Order was responsible for 4,000 jobs and maybe $1 billion in spending during its 20-year tenure.
Using tax incentives, municipalities try to attract shows like Law & Order …and also Jimmy Fallon.
The Daily News says that New York State created a Jimmy Fallon tax credit. Whereas the state already offered a tax credit to movie and TV producers equal to 30% of production costs, it did not cover shows that had relocated. Now it does. And The Tonight Show Starring Jimmy Fallon has returned to NYC.
In a preliminary state budget, the provision said that, “a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season in New York,” would receive state tax credits if it was filmed before a studio audience of more than 200 people and had an annual production budget that exceeded $30 million or $10 million in capital expenses.
Worried about competition from New York and other places, the California lawmakers are considering a bill to increase the tax incentives they offer to the film and TV industry. As with NYS, the issues relate to jobs, revenue and small businesses.
Sources and Resources: These Daily News articles, here and here, describe how NY tries to attract TV and movie makers, the LA Times tells about the new incentives that California lawmakers propose while on the other end, the NY Times detailed what TV production firms spend. For still another perspective, this academic paper looks at the costs and benefits of trying to attract the film industry.