Tax breaks lure big-name films to North Carolina

Charlotte ObserverJanuary 17, 2012 

Thanks to new but controversial tax breaks, 2011 was a marquee year for North Carolina's film industry, which landed big-name projects "Iron Man 3," "Homeland" and "Hunger Games."

Bringing red-carpet stars Robert Downey Jr., Claire Danes and Jennifer Lawrence, studios chasing tax incentives increased their spending in North Carolina nearly threefold - from $75 million in 2010 to $220 million in 2011.

It was a record year, and 2012 should be even better - the N.C. Film Office is projecting the industry will spend at least $275 million.

A year ago, state law changed so moviemakers could get a refund on 25 percent of salaries and money they spent on taxable items in North Carolina, worth up to $20 million per project. It made the state among the most competitive in the nation in tax breaks for the industry.

But even with the investment windfall, Hollywood tax breaks remain a contentious issue. Some states - like South Carolina and Michigan - have cut back on incentives, questioning their value. Even in North Carolina, some ask why the entertainment industry should get special treatment.

"We're really conservative with how we spend the taxpayer's money," says Tom Clark, who directs South Carolina's Film Office and has watched as state after state increased incentives in the last decade.

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