E&Y and MPAA Release Tax Credit Benefits Study

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Ernst & Young LLP earlier this month released a study assessing the "economic benefits of film production tax incentives". The study, entitled "Evaluating the effectiveness of state film tax credit programs" was commissioned by the Motion Picture Association of America (MPAA) and is available for download from the E&Y site.

The study attempts to devise a methodology for evaluting film- and TV-related tax incentive programs, and, as noted by Deadline Hollywood, E&Y argues that "The economic benefits to residents extend beyond the production activities themselves and include increased activity by suppliers to the film industry and increased consumer spending from higher incomes". While the study is a little light on actual numbers, it rather sensibly notes that "Whether the costs of the programs are justified by these economic benefits must be answered by comparing the benefit-cost ratios of film credit programs with those achieved by other economic development programs."