By John Bebow - May 15, 2008
You've probably seen the glowing headlines in recent weeks about Lansing's effort to draw the film industry to Michigan.
With rare bipartisan cooperation, legislators enacted a huge tax break in March to draw film companies to Michigan and two months later more than a dozen projects have been approved for the tax breaks, Crain's reported last week.
"It's difficult for other states to beat this incentive package because it's so aggressive," Chris Baum, senior vice president of sales and marketing for the Detroit Metro Convention & Visitors Bureau told Crains.
It also appears it may be painful for Michigan taxpayers to underwrite the tax breaks for the movie deals. Incoming sales and other taxes as a result of the new film work won't even come close to making up for the lost film tax revenue due to the tax breaks. New estimates from the Michigan Senate Fiscal Agency estimate a net loss to the state general fund budget next year of more than $100 million in 2008-09.
2 Comments
I neglect to see how NEW business is costing the taxpayers anything.
When are the tax and spend minds going to realize that 100% of NOTHING--which is what we had before the "breaks" is still NOTHING.
But, what the heck. The new "fair" tax is driving out existing business at a record pace. Why bring ANY business here.
Our citizens apparently don't need jobs and the government will just continue to spend money they no longer have.
Let us look at 3 of the business taxes to be eliminated by the Michigan Fair Tax. How do they apply to movie companies coming to Michigan to make a film, but not permanently moving their headquarters to Michigan. The movie filming is all expense.
* MBT - None, the movie company is all expense. No headquarters, so there is no income to tax. Set up as a foreign corporation.
* Business personal property tax - Minimal,bring only the cameras and other equipment needed for the brief time to shoot scenes.
* Business sales and use taxes - Minimal, purchase all material in California and bring it to Michigan.
* Expenses are: building leases, equipment rental, licenses, fees, motels, hotels, restaurants, and other expenses, local temp hiring. Pay all movie actors, producers, director, camera men, and other staff on California payroll.
Do you see the picture, the 40 % tax credit is over-rated.
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