Kentucky’s new law providing tax incentives to filmmakers is working
State officials are hoping it will also help to spur tourism
(April 2016) – Last year, Kentucky received a major boost in its efforts to attract film and television productions. Tax incentives have given the state an advantage in a competitive market. Officials hope these incentives will also boost tourism.
On May 7, 2015, then-Kentucky Gov. Steve Beshear signed House Bill 340. In a press release he said, “House Bill 340 gives Kentucky a strong advantage when competing with other states for outside film projects. Increased film production in Kentucky means a boost to local economies and an opportunity to highlight the Bluegrass state on both big and small screens across the world.”
Soozie Eastman has already seen the dramatic effects of this bill. She serves as the executive director of the Louisville Film Society.
Photo courtesy of Ellie Troutman
Actor Jon Voight (far right) is pictured on his horse with other ranchers during Day 1 of filming JL Ranch in Oldham County, Ky. The movie is the second Hallmark Channel movie filmed in Oldham County in the past year and is a result of tax abatement incentives offered by Kentucky’s new law House Bill 340, passed last year.
“There has been a definite uptick in productions coming to film in the city and state as well as increased interest in what the Commonwealth can offer visiting productions in terms of incentives, crew and locations,” said Eastman. “House Bill 340 has definitely put Kentucky on the production map.”
Eastman has had ample experience in the field. Her first job straight out of grad school was for Michael Ovitz, founder of CAA, then the largest artists’ agency in the world, and former president of Disney. From there she worked in development for both television and film, created programs with studios for up-and-coming writers, and shot short films and documentaries.
Many filmmakers and production companies have already seen incentives that have helped curb their film production costs. Two Hallmark Channel movies were filmed last year and in early 2016 in Oldham County, Ky. Previous movies filmed in Kentucky include “Secretariat,” “Elizabethtown” and “Seabiscuit.”
“Kentucky was definitely behind for years, but with the passage of House Bill 340, we now offer one of the most competitive packages,” East-man said. She praised the Kentucky Film Commission and the Kentucky Film Office by saying they “really did a great job conveying to our legislators why this bill would be of benefit to the state. Now it’s on the local filmmakers, film commissions and film offices to get the word out far and wide to make sure production companies across the country know what we are offering.”
| Jay Hall
Tax incentives offered to filmmakers include increasing the existing income tax credit from 20 percent to 30 percent for each production’s Kentucky-based spending. Productions may receive a five percent incentive for using Kentucky resident labor; the maximum incentive possible is 35 percent.
Eastman summed it up by saying, “I think this past year of House Bill 340 has been a great sign of what is to come. And if 2015 was any indication, then the Bluegrass State should have a nice, prosperous filmmaking road ahead of us.”
In addition, film production incentives are available to companies that spend at least $250,000 to produce feature films or TV shows in Kentucky. Commercials are eligible with required expenditures of $100,000.
Documentaries and Broadway productions are also eligible with an expenditure minimum of $20,000; for a Kentucky-based company, the threshold would be $10,000.
Qualified expenditures include, but are not limited to, such things as the production script and synopsis, set construction and operations, wardrobe, accessories, and related services, lease or rental of real property in Kentucky as a set location, vehicle leases, food and accommodations.
Jay T. Hall, Deputy Commissioner of the Kentucky Department of Travel and Tourism in Frankfort, said that from 2009 to June 2015, the incentive program saw 26 applications for films to be made in Kentucky.
“Since July 2015, there have been 36 applications,” he said.
“Kentucky is now one of the most competitive states for film incentives. In the past few weeks, 13 films have applied for incentives.”
Hall said most productions companies don’t bring a crew with them but rather hire a local crew. He said Kentucky has a huge crew base in the state centered on Louisville, Lexington and northern Kentucky.
Eastman said that attracting productions to the state increases the chances of local talent being cast in productions, as well as local crews. “We have such incredible talent here, and it’s a huge money-saver to use talent from right inside the community.”
As to the importance of the incentive on the state’s economy, Eastman said, “That is really to be determined as the incentive is utilized. Many states have had great financial windfalls from film incentives and we hope to follow in their paths. The key to building a film economy is to have productions utilizing the incentives.”
“We’re just getting started,” said Hall. The state has seen $13 million in economic activity, and that is only for those films that have applied for and received the incentive, he said. There is a movie currently preparing to be shot in northern Kentucky.
Hall sees it as “a fledgling industry in Kentucky. The goal of the Kentucky film industry is to make it a viable and long-lasting industry.”
Applications for film production incentives are reviewed and approved by the Kentucky Film Office, Secretary of the Tourism, Arts & Heritage Cabinet, the Finance and Administration Cabinet and the Kentucky Tourism Development Finance Authority
Hall thinks the tax incentive program will boost tourism within the state. “Look at recent TV shows, such as ‘The Walking Dead.’ It was filmed in a town in Georgia that has seen a substantial increase in tourism. Everyone wants to see the town where the show is filmed.”
There are other advantages to filming movies in Kentucky. A major attraction is the different landscapes Kentucky has to offer such as mountains, plains, hills and lakes, Hall said. In certain areas of the state where mining has taken place, a film crew can “make it look like the surface of the moon or the deserts of Afghanistan.”
As a testament to the limitless filming locations in Kentucky, Jeff Day, producer of “Unrequited,” has been quoted as saying, “Kentucky was the perfect place to film this movie.
Our local connections and talent made it worthwhile to shoot and produce this movie in our home state.”
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