Lights, camera…film credits? Lawmakers consider Michigan movie incentives

• Pending legislation would offer filmmakers up to 30% tax credits for filming in Michigan, hiring Michigan workers
• Backers say the revamped plan is based off successful programs in other states and would encourage new investment in Michigan
• Critics say any economic benefit from more movies in the state won’t be worth the lost revenue

Michigan lawmakers are considering a second take on offering incentives for in-state film and television projects — but critics are concerned taxpayers have seen this movie before. 

House and Senate legislation introduced last summer would create a transferable tax credit for Michigan-based multimedia projects, ranging from traditional film and television productions to other work, such as commercials, corporate media and music videos.

In testimony during a packed House Economic Development and Small Business Committee Tuesday meeting, supporters said the latest effort is a departure from Michigan’s last foray into film incentives. 

Related: 

• Michigan film incentives: The Sequel! Lawmakers propose new tax credit
• How Michigan pork spending rose tenfold to $1B under Whitmer (with GOP help)
• Whitmer seeks $5,000 tax credit for Michigan caregivers. How much will it help?

The previous rebate program attracted large-scale projects like “Transformers” and “Batman v. Superman” but shuttered in 2015 amid criticism that the return on investment for taxpayers was minimal. 

“It's true that many years ago, Michigan tried a film incentive program, and it didn't really go that well,” Rep. Jason Hoskins, D-Southfield, told his colleagues Tuesday. “The worst thing we can do now is just not try, and allow Michigan to fall further behind the rest of the nation on this.”

Unlike the previous program, which offered rebates of up to 42% of filmmakers’ in-state production costs, the latest plan would allow eligible companies to get back up to 25% of total spending in tax credits for filming in Michigan and up to 30% if the project incorporates the Pure Michigan logo and other Michigan film industry affiliates, capped depending on the length and duration of the project. 

A separate credit would offer 30% of total spending for hiring Michigan residents or 20% for hiring nonresidents. 

If a company obtained credits but doesn’t have a Michigan tax liability, the legislation as proposed would allow those credits to be sold to a Michigan-based business.

Alexander Page, legislative chair of the Michigan Film Industry Association, told lawmakers the bills are based on extensive research into other states’ programs and are designed to keep the money in Michigan, regardless of whether filmmakers are based in-state. 

To obtain the credit, companies would need to keep, among other things, records of the number of in-state workers hired for the project, any outside vendors involved and spending receipts, as well as spend at least $50,000 for shorter projects and at least $300,000 for feature film productions.  

The program would end 10 years after implementation unless lawmakers gave the go-ahead for it to continue.

As of 2022, at least 35 states offered tax incentives for film production, according to the National Conference of State Legislatures. Without a similar program in place, Page said “Michigan simply can't compete” when it comes to attracting lucrative projects that boost local businesses and showcase the state’s scenery for larger audiences. 

Critics argued that any benefits stemming from film incentives aren’t worth the trade-off of losing out on tax dollars.

James Hohman, director of fiscal policy for the free-market think tank Mackinac Center for Public Policy, called the proposed credits an “expensive favor that will only leave taxpayers worse off” and pointed to research suggesting that film incentives have left a negligible economic impact in Michigan and other states. 

Hohman argued the tax credit proposal would decrease transparency and result in “laundering payments to film producers through other taxpayers.” 

“In lieu of this program, you would have $2 billion worth of cash that you could spend on schools or roads or sewers, or any other public service that is a priority for lawmakers.” 

Although some Republican lawmakers have concerns with the bills, there is some bipartisan support. 

Rep. John Roth, an Interlochen Republican who is also sponsoring the plan, said he believed the legislation would help build long-term stability in the state’s film industry, citing his own experience with a film shot at his marina. 

He sees a robust film program as a way to keep young creatives in Michigan — including his daughter, who is currently studying film production in Michigan and is planning to leave for work opportunities elsewhere when she finishes her degree at Grand Valley State University. 

Sahir Rashid, a former Detroit resident who has worked on film projects since 2009, said he had to move south for work after opportunities dried up once the previous incentive program ended. Now in Atlanta, Rashid predicted that many creatives would return to Michigan if they had the opportunity. 

If the proposed bills pass, “Michigan will blow up, and a lot of people will stay and a lot of people who left would come back,” Rashid told lawmakers in a video presentation. “Work could be bigger than it ever was before.”

The bills, which are still being considered at the committee level, would need majority approval in both the House and Senate and a signature from Gov. Gretchen Whitmer to become law.