Georgia might be on the cusp of a music industry boom thanks to the Georgia Music Investment Act that was signed into law back in May. The act will provide tax incentives for the music industry to create economic activity in the state, activities such as tour origination and music recording.
The act itself is modeled on the tax incentives given to the film and television industry to attract that industry to the state of Georgia. With the new tax incentives set to kick in in 2018, it’s worth the time to take a look at the effects the tax breaks had on the film industry and see what might be in store for the music industry.
It used to be that film productions only took place in Georgia when films needed to specifically portray Georgia and decided to film onsite instead of on a Los Angeles sound stage. After the bill took its current form in 2008 though, Georgia’s film industry skyrocketed and it is now the third most popular filming location in the U.S. after California and New York.
One of the shining gems in the crown of success Georgia officials like to point to is Pinewood Atlanta. The three year old facility contains 18 sound stages on 700 acres and is the largest such facility in the country outside of the Los Angeles-area. Here, productions are filmed on recreations of locations around the world, while taking advantage of Georgia’s tax break.
There are towns like Senoia, Georgia, which you might recognize from The Walking Dead. Although the show, unlike many other productions coming to the state, is actually set in Georgia, its breakout popularity has led the town to be transformed into a veritable Walking Dead tourist destination. There are stores selling Walking Dead knick-knacks, Walking Dead tours of filming locations around town, and more. The Walking Dead is supporting the town’s economy in a big way.
If giving these kinds of tax breaks were easy, every state would be doing it. There are trade-offs though. Georgia is drawing companies away from California and New York because not only are there film industry specific tax breaks, but the state is overall cheaper than its highly taxed counterparts. That money film studios are making back comes at the expense of Georgia’s own state revenues. For the pro-business Republican leaders of Georgia, there’s a lot invested in seeing these tax breaks be successful because they represent an important example of their economic beliefs. They contend that the trade-off is worth the increased economic investment.
There is evidence to the contrary though. A Georgia State University study estimated that the film industry credit meant that Georgia was giving up $376 million in potential income for 2017. A report from The Pew Charitable Trusts stated that despite Georgia state leader’s victory laps, there wasn’t a proper infrastructure in place to actually determine if the lost revenue was being offset by increased economic activity.
What does that say about the music industry? Obviously the exact parameters of the tax incentives aren’t the same and the medium is definitely not the same. However, for those looking to open studios, or have already opened studios, or are looking to hire Georgia talent for their tours, etc., these tax incentives look pretty set to bring the music industry to Georgia. For Georgia state officials, it’s a big step in proving the cross-applicability of the tax incentives across industries. Going forward, there might be tax incentives for other industries to attract them to Georgia, beyond film and music.
If you’re a musician or in the music industry, definitely consider Georgia. Things are likely about to get really good for your financially there. If you’re a resident of Georgia though, it’s still a wait and see whether these tax programs are to your benefit too.
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