A bill that would reinstate West Virginia’s film tax credit is now headed to the desk of Gov. Jim Justice.
Using the proposed tax credit, filmmakers could recoup up to 27 percent of spending on movies and television shows in West Virginia that cost at least $50,000 to make. The state would have no limit on the amount of film tax incentives it can give out in a year.
The program would be administered by the West Virginia Office of Economic Development. The office would have the discretion to reject any project that “negatively portrays the state of West Virginia.”
The economic development office would be required to develop a database of locations, music, and other resources available for use in film projects.
West Virginia used to have a film tax credit, but it was ended in 2018 after a legislative audit report deemed the credit as providing only “minimal economic impact.” Republican Del. Dianna Graves, the lead sponsor, said she’s spent nine months closing the loopholes in meetings with the legislative auditor and others.
The bill’s supporters say other states in the region have the tax credit and West Virginia is missing out on projects coming to the state that could bring economic development opportunities to communities.
The bill underwent several changes throughout the legislative process. Earlier versions of the bill allowed commercials to be eligible for the tax credit and put a cap on the amount of incentives that could be given out in a year. Those provisions were later cut.
West Virginia senators passed a bill Wednesday that would reinstate the state’s film tax credit after one Republican lawmaker spoke against the legislation, saying it benefits Hollywood while “the people of West Virginia are left hanging out to dry.”
“I have a problem that Bette Midler qualifies for millions of dollars in tax credits,” said Republican Sen. Robert Karnes, the only senator to vote against the bill. Karnes said more resources should instead go to support regular people in the state.
“Gavin Newsom’s people are getting a little bit of almost heaven with this bill, but God’s people are basically told to go to hell,” he said.
Using the proposed tax credit, filmmakers could recoup up to 27% of spending on movies and television shows in West Virginia that cost at least $50,000 to make. The state would have no limit on the amount of film tax incentives it can give out in a year, according to the version of the legislation passed by the Senate on Wednesday.
The original version passed by the House would put a $10 million cap on tax credits each fiscal year, which starts in July. That bill said the office could give out more credits for any feature-length films produced with “West Virginia” in the title or if the subject of the film is “clearly identified as West Virginia.”
The House must now approve the Senate’s changes to the bill before it can be sent to the governor for signature.
West Virginia used to have a film tax credit, but it was ended in 2018 after a legislative audit report deemed the credit as providing only “minimal economic impact.” Republican Del. Dianna Graves, the lead sponsor, said she’s spent nine months closing the loopholes in meetings with the legislative auditor and others.
The bill’s supporters say other states in the region have the tax credit and West Virginia is missing out on projects coming to the state that could bring economic development opportunities to communities.
Democratic Sen. Hannah Geffert said Wednesday that when film crews come to West Virginia, they hire residents for jobs and spend money at West Virginia businesses.
“I wouldn’t reject us out of hand just thinking it’s about Bette Midler,” she said.
Midler has been mentioned more than once by West Virginia politicians in recent months after the singer and actress called West Virginians “poor, illiterate and strung out” in a tweet after Sen. Joe Manchin refused to support President Joe Biden’s Build Back Better Act.
After receiving backlash, Midler apologized “to the good people of WVA” for her “outburst” in a follow-up tweet later that day.
In January, Republican Gov. Jim Justice ended his televised State of the State address by lifting up his English bulldog and flashing its rear end to the cameras and crowd and saying: “Babydog tells Bette Midler and all those out there: Kiss her heinie.”
In his remarks on the House floor Wednesday, Karnes also mentioned Oscar-winning documentarian Michael Moore.
“When Michael Moore comes to West Virginia to do his much-anticipated biopic of former senator Richard Ojeda down in Logan County, the people of West Virginia are going to foot the bill for that,” he said.
Ojeda is a former West Virginia Democratic state senator who briefly ran for U.S. president in the 2020 election.
Movie makers may be returning to the Mountain State if they can get a break on their taxes. A bill that brings those breaks back is gaining legislative traction.
West Virginia’s Film Investment Tax Credit was repealed in 2018. Del. Dianna Graves, D-Kanawha, admits the previous law was bad, had loopholes, inconsistencies and did not provide a positive state return on investment. The lead sponsor of House Bill 2096, Graves said the new bill fixes what was broken, and more.
“The cap was too low. In fact, that was included in the audit done on that,” Graves said. “So we’ve raised the cap, and we’ve strengthened the audit procedures to make sure that it’s dollars spent here that’s going to generate a return.”
The new bill offers $10 million annually in film tax credits, and moves administration from tourism to economic development. That’s a move that makes good sense to bill supporter Del. Chad Lovejoy, D-Cabell.
“We need to diversify our economic strategies,” Lovejoy said. “And this is one more tool in the toolbox. We want to bring businesses to West Virginia and help our people participate in filmmaking.”
Del. Brandon Steele, R-Raleigh, voted against the film tax credit. Steele was concerned the bill still lacked adequate safeguards, and said it should not be a legislative priority.
“Back home in Raleigh County, you know, they’re not filmmakers,” Steele said. “They own small businesses, they’re paying a lot of B&O tax, they have local use taxes on them.”
Every West Virginia border state offers a film tax credit. Graves says there are filmmakers knocking at the door – ready to say lights, camera, action in the Mountain State.
“I want this money to come to West Virginia,” Graves said. “I want heads in beds for hotels, I want catering. I want construction. I want all of that. Industry drivers. I want them here in West Virginia. Spend your money with us.”
The Film Tax Credit bill passed the house 87 to 11 and is now in the Senate Finance Committee.
Five years ago, the West Virginia Legislature ended the film tax credit, but a new bill making its way through the Senate is looking to bring it back.
Film tax credits are given to film production companies as an incentive to produce commercials and movies in the state. They’re credits based on a percentage of the money spent in the state.
Before the credit was eliminated, a number of documentary films and commercials were produced in West Virginia’s eastern panhandle. The film Super 8 was also produced in Weirton.
Del. Dianna Graves (R -Kanawha) spoke to the Senate Economic Development Committee in support of the bill. She is an accountant and also works with filmmakers.
“We have seen a growth of the streaming industry. All the other states, including our neighboring states, are capitalizing on it,” she said.
This new bill would restore West Virginia’s film tax credit with a $10 million ceiling if it becomes a law. It passed the Senate Economic Development Committee Wednesday afternoon and now moves on to the Senate Finance Committee.
Graves said the law, if passed, would not bring back the West Virginia Film Office that was disbanded in 2017.
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.”
Credit Perry Bennett / WV Legislative Photography
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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.
A bill that would revive film production tax credits in West Virginia has passed the House of Delegates.
Last year Gov. Jim Justice signed legislation ending the state’s program after an audit showed the $5 million in annual credits produced little economic benefit.
Delegate Dianna Graves is the bill’s sponsor. The Kanawha County Republican says the credit is a great advertising opportunity for the state.
The bill passed on a 73-26 vote after long debate Wednesday. It now moves to the state Senate.
The bill would not revive the defunct West Virginia Film Office.
