Can a New Tax Incentive Revive Colorado's Dying Film Industry?

Cinema Day rally supporters on the west steps of the Capitol.EXPAND
Cinema Day rally supporters on the west steps of the Capitol.
Lauren Antonoff
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Shockingly few films set in Colorado are actually filmed here.

The trend began as far back as 1931 with Dude Ranch. There was also the 1940 Western Colorado; the 1980 horror film The Shining; the 2000 biopic Take Me Home: The John Denver Story; and the 2018 historical drama BlacKKKlansman; among many others.

Despite Colorado's picturesque landscapes and growing workforce, the state has yet to gain traction as a destination for large-scale productions, causing many locals in the industry to leave for larger markets.

Now, students, teachers, filmmakers, organizers and lawmakers have taken to the Statehouse with a new film-incentive bill they hope will bring the industry to Colorado — and keep it here.

On Friday, March 6, the bill was introduced into the House as local film supporters gathered for a Cinema Day rally on the steps of the State Capitol.

There, Patrick Hackett, a Denver filmmaker, greeted a crowd of over 100 advocates, explaining that when he came to Colorado, he was able to make his way as a filmmaker. But sadly, he says, “Over the years, I have seen many people come in and out of this community. Many have flourished, some have carved out wonderful niches for themselves, but sadly, too many of us have packed up and taken our skills to another state."

He adds, “After years of diminishing support and growing neglect, Colorado’s film industry is needlessly in decline, all while global demand for our industry soars.”

Each year, thousands of Coloradans graduate from local colleges and universities with degrees from nationally recognized film and television programs, including the Department of Cinema Studies and Moving Image Arts at the University of Colorado Boulder, the Department of Film and Television at the University of Colorado Denver, and the Colorado Film School. But when their job hunts begin, most graduates realize Colorado has little to offer.

“We are here to make sure that our students have an industry to go into when they finish their education,” Hackett explains. “With transferable tax credits, we can achieve all of this without taking a dollar from any other program.

“We are here to fight with our brothers and sisters so that we may all do the job that we love in the state that we love,” he adds.

Patrick Hackett speaks at a Cinema Day rally.EXPAND
Patrick Hackett speaks at a Cinema Day rally.
Lauren Antonoff

Now, Democratic representatives Leslie Herod, Daneya Esgar and Nancy Todd are proposing a transferable tax credit aimed to generate more media production within the state. If their bill passes, productions that employ at least half their workforce in-state would receive a tax break based on projected tax revenue; this is a sharp contrast to the state's current film incentive, which relies on money being taken from the state’s general fund.

Colorado's current 20 percent tax-rebate credit, reduced from an annual cap of $3 million statewide to a mere $750,000 in 2017, can't compete with the neighboring markets in New Mexico and Utah.

In New Mexico, incentives provide a 30 percent refundable tax credit for qualifying TV productions and a 25 percent refundable tax credit for film and standalone post-production projects. In 2019, the state more than doubled its annual cap on incentives, boosting the annual statewide budget from $50 million to $110 million, making New Mexico one of the nation's most competitive destinations.

In Utah, incentives provide a 20 percent tax credit or cash rebate for qualified in-state spending between $500,000 and $1 million, and a 20 to 25 percent credit or cash rebate for spending over $1 million dollars in the state. The annual statewide cap for these incentives is $8.29 million.

Under the proposed bill, Colorado could greatly increase its incentive budget without cutting funding from existing programs. If out-of-state productions invested in Colorado, they would earn far more tax-incentive credit than they would owe to Colorado collectors, as most of their taxes would be due out of state. Therefore, they would have excess tax credits that they could then sell to Colorado-based companies, who could use those credits to reduce taxes owed.

Because of the cost involved in the buying, selling and administration of transferable tax credits, this type of incentive only makes sense for high-budget productions. Therefore, the bill is positioned to accompany the existing incentive, not to replace it.

Representative Leslie Herod.EXPAND
Representative Leslie Herod.
Lauren Antonoff

Transferable tax credits are used in strong film states such as Georgia, California and Louisiana, among others around the country. Under the proposed bill, Colorado would offer an 18 to 22 percent credit of total qualified expenditures, depending upon whether the production took place in a non-metropolitan county or a municipality with a population of 150,000 or less, with production in rural areas qualifying for more compensation. However, under the proposed bill, Colorado would cap funding for this incentive at $5 million annually, which is still lower than what New Mexico and Utah have to offer.

Nevertheless, even a few large-scale productions per year could boost the state's economy.

Representative Leslie Herod says, “I love film. And I’m sick of films talking about Colorado and not being shot right here in our own state.” More productions, she argues, would stimulate many industries in Colorado, especially in rural areas.

"Hotels, restaurants, dry cleaners, grocery stores, gas stations and retail stores are just a few of the many types of businesses that see increased revenue from media productions," she says.

Mayor P.T. Wood of Salida.EXPAND
Mayor P.T. Wood of Salida.
Lauren Antonoff

Mayor P.T. Wood of Salida spoke about how, in 2015, the crew of Fast & Furious 7 spent about five weeks in Salida. In addition to the benefits listed by Herod, he noted that just last week, in March of 2020, he saw one of the Fast & Furious crew members "on vacation with his family, spending money in Salida."

Skeptics in the industry have voiced concerns, on the condition of anonymity, that even if tax credits draw large, out-of-state production companies, these projects are likely to only benefit lower-level industry professionals, because the 50 percent of workers hired locally under the criteria of the incentive are not likely to include roles like directors, producers, cinematographers, set designers or lead actors. Out-of-state companies are far more likely to employ production assistants, craft service and catering providers, and drivers. That is, unless the bill specifically stated otherwise — which it does not.

To this, Herod says: "Any job that's created is a good job," especially if it means revenue for rural areas. 

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