Film Industry Says Without Larger Rebates Future Film Projects Might Go Elsewhere

Jan 17, 2019

Credit Park City Film Studios

Utah’s rebate/tax incentive program has attracted several films and TV productions to the state.

But now industry professionals are warning that productions could leave Utah to go elsewhere—because there’s a financial cap on the program.

They will be lobbying the Utah Legislature on the issue—which affects, among others, the Utah Film Studio at Quinn’s Junction.

The problem, reportedly, is that Utah’s incentives are capped at no more than $8.29 million a year.

Marshall Moore, a spokesman for the Utah Film Studio and also a former director of the Utah Film Commission, said the program started in 2004 and really came into its own in 2011.

“Started very modestly at 10% and one million dollars. Today we sit at about $8.3 million and a 25% credit which functions like a rebate from the state. It’s post performance and its based on the hiring of local crew, cast and goods and services.” Virginia Pearce the director of Utah Film Commission thinks that amount is on the conservative side. Moore agreed. “It’s definitely conservative but you know that’s the way we’ve managed the program since its inception. It’s been conservative it’s proved to be successful.”

He said right now the Quinn’s studio is totally taken up as a production base for the TV series “Yellowstone”. But the tax incentive cap limits their ability to look to the future.

“What it has done, it’s handicapped us in our ability to expand. There is an expansion plan that’s been in place since day one that allows for a couple more studios, stages to be built. Some more production office space to be built, a hotel, and other things. That’s been on the plans for years. The restrictions that exist in the current program don’t allow us to make that expansion because mathematically it doesn’t make any sense. You can only attract a finite number of productions.”

The creator of “Yellowstone” Taylor Sheridan told the Salt Lake Tribune that he probably would have to go to New Mexico for a feature-film project he’s planning.

And, Moore noted, Sheridan is now part of the Utah film community.

“Utah is his home. He would obviously prefer to stay here. He’s talked to us about expansion in the past. We’ve told him the restrictions, I know he’s on board. I know he’s working with Virginia at the film office to help move things forward. Yes, in the current state it would be difficult because of having Yellowstone there to do another show. I suppose there could be some work done there during a hiatus period like now. But what you would really need is some additional space to accommodate another big feature that he’s planning.”

We asked what he says to Utahns who feel that the state shouldn’t subsidize millionaires from Hollywood. Moore said it’s not a subsidy.

“It’s a rebate, it’s post performance they have to spend the money first. They have to hire the people first. They have to go through a strict third-party audit to get any dollars back. So, it’s 25 cents back on each dollar they spend on Utah goods and services, cast and crew. It has to be residents of the state of Utah and the vendors have to be a tax paying entity to qualify. So, we’re not giving them anything in advance we’re just enticing them to choose Utah versus somewhere else because it’s competitive. It’s just like your local grocery store or pharmacy that offers a rebate coupon.”

The Motion Picture Association of Utah will be lobbying Capitol Hill.

Meanwhile, Democratic Representative Brian King (whose district includes part of Snyerville) said he’d be willing to look at raising the incentive cap, though it will be a budget challenge.
 

“Because what you have when the states compete against each other or when cities compete against each other for luring these economic projects is a race to the bottom. In terms of how much dough we can throw at economic drivers such as the film industry. You saw it with Amazon when they were shopping around their second headquarters every city and county and state who thought they had an opportunity to get Amazon was willing to just throw enormous amounts of money up and say hey come to our place rather than go to our competitors place. You know businesses recognize that and they drive a hard bargain and they try and get as much out of this whole process as they can.”

King noted that it’s a competitive market, with 30 other states, and other countries, offering incentives.

“We do certainly in Utah. We’ve been a hospitable place for it in the past. I hope to continue to have that in the future because I think it brings some good exposure for tourism. I think it brings some good jobs to the economy of course. Summit county and the ski industry and the beauty of that place up there. It’s not just the ski industry it’s the beauty of the Uintas and just the whole area. We want to have filming, good clean industries like that, that pay well and have them come and attract them.”