Liz McCormick Published

Legislation to Reinstate the W.Va. Film Tax Credit Could Return in 2020

West Virginia's now-defunct film tax credit was around for ten years before being eliminated by the West Virginia Legislature in 2018. A legislative audit report found it provided "minimal economic impact" to the state.

West Virginia’s film tax credit was eliminated by the West Virginia Legislature in 2018 after a legislative audit report deemed the credit as providing only “minimal economic impact.” But people who work in the film industry don’t agree. An attempt to resurrect the credit failed this past session, but supporters are hopeful it will make it through the next legislative session.

Robert Tinnell is a West Virginia filmmaker who was born and raised in Marion County. He’s been making movies professionally since 1980, and since 2005, he and his brother Jeffrey have been running a production company called Allegheny Image Factory out of the Morgantown area.

They’ve produced award-winning films, documentaries, music videos and commercials. One of their recent feature films was, Feast of the Seven Fishes based on Robert Tinnell’s graphic novel of the same name. The film featured actors Skyler Gisondo and Madison Iseman and was filmed entirely in West Virginia.

Feast of the Seven Fishes will be available later this year but possibly under a new name. Tinnell said the film will likely be released under the title, 7 Fishes & Christmas ’83.

Tinnell said production of the film benefited greatly from West Virginia’s now-defunct film tax credit. He said the movie was able to be filmed and produced in-state, attracting actors and crew from the larger-film industry outside West Virginia thanks to incentive from the tax credit.

Now, since the credit was eliminated, Tinnell said it’s been harder to attract big productions to film in West Virginia.

“Stripping us of the tax credit, effectively disabled our ability to bring feature films or TV projects to West Virginia,” Tinnell said. “I mean, it’s that simple. Whether you agree with the tax incentive business model or not, the reality is, the industry and states, and even national governments, embrace the policy. And it simply is the cost of doing business.”

After losing the credit, Tinnell said it cost his production company two films and the potential of bringing about $4 million into the state.

“We say we want to diversify the state’s economy. We don’t want to just lean on extractive industries, it’s just too, up and down, and it’s putting all your eggs in one basket,” he said. “Here’s a really smart way to do it – and in a way that boosts not only the entertainment industry, but it’s just a great way to promote tourism.”

Del. Dianna Graves, R-Kanawha, discusses HB 2941 (reinstating the film investment tax credit) on the House floor on Feb. 27, 2019.

Credit Perry Bennett / WV Legislative Photography
WV Legislative Photography
Del. Dianna Graves, R-Kanawha, discusses HB 2941 (reinstating the film investment tax credit) on the House floor on Feb. 27, 2019.

During the 2019 state Legislative session, Del. Dianna Graves, R-Kanawha, introduced a bill that would have reinstated the film tax credit – but with tweaks and adjustments based on the legislative audit report that made 12 recommendations if the credit were to be kept.

Graves has worked in the state’s film industry as both an accountant and producer, and she argues the tax credit was working but admits it did have problems, but problems she sought to fix with her bill.

“Even the audit admitted that it brought economic benefit to the state, it just didn’t think there was enough benefit to justify keeping it, well, then fine, let’s not get rid of it completely. It’s working. Let’s make it better. That was my goal,” she said.

Graves’ bill increased the cap of the film tax credit from $5 million to $10 million, and it would have required a film production company to spend at least $50,000 in-state before they would be eligible for the credit. After that, for every $100 spent, that production company could take home $27, but the remaining $73 would stay in-state.

Her bill managed to pass out of the House of Delegates but not without pushback. House Finance Chairman Del. Eric Householder, R-Berkeley, was one of 26 who voted against the bill.

Householder admits he’s not a fan of tax credits. He said they allow the government to pick economic winners and losers. He also argues the original film tax credit just wasn’t justifiable.

“In 10 years, only $8.6 million in tax credits were used,” Householder explained. “And if it’s such an attractive, competitive force, we would see more companies coming here, wanting to come here and take advantage of the tax credits, and it just wasn’t happening.”

He also felt Del. Graves’ bill didn’t make enough of the changes that were recommended by the audit.

“If she tightens all those up or takes those recommendations, I think it will pass the scrutiny,” he said. “Right now, I don’t foresee it happening since, remember, it was repealed in 2018. So, maybe in a year or so, maybe next legislative session, [it] might stand a better chance.”

Graves’ bill may have made it out of the House chamber last year, but it was never taken up by the Senate Finance Committee. In an emailed statement to West Virginia Public Broadcasting, Senate Finance Chairman Craig Blair, R-Berkeley, said he also felt Graves didn’t make enough changes recommended in the audit report.

Like Blair and Householder, Graves identifies as a fiscal conservative, and she said she doesn’t often vote for tax credits but says the film tax credit is different.

“The West Virginia film tax credit; it functions much more like advertising expense than a traditional tax credit,” she explained. “We are trying to entice film companies and movie studios to come here and film. But instead of giving this money up front, like you do with advertising expense, we only give it if you come here. So, that means that our advertising expense has a 100 percent success rate.”

Graves said the film tax credit helps to diversify the state’s economy. She plans to reintroduce her bill during the 2020 state Legislative session.

She said she hopes she can communicate to the Senate in particular of the credit’s benefits, increase the cap, and get it signed by the governor.

**Editor’s Note: This article was edited on Jun. 28, 2019 to add the correct spelling of Robert Tinnell’s last name.