Funding for Nevada’s film incentives program has been slashed from $80 million to $10 million covering a four-year period which began back in January. Catalyst for the cutback was legislation signed last week by Gov. Brian Sandoval which provides Tesla Motors with well over $1 billion worth of financial incentives in exchange for the company bringing its battery factory to Nevada. To help offset the cost of the Tesla package, state legislators made other cuts, including $70 million in film subsidies.
Billed as being the largest lithium battery factory in the world and pivotal in the electric car-maker’s plans to begin turning out a more affordable line of vehicles within three years, the Tesla operation will generate, according to projections, more than 20,000 jobs and $100 billion for Nevada’s economy over the next 20 years.
While gains for the state economy relative to Tesla have been estimated, not so the losses in lensing that will result from an 87-plus percent reduction in funding for a program under which companies that spend a minimum of $500,000 and shoot at least 60 percent of their project in Nevada are eligible for a transferable tax credit of 15 to 19 percent of qualified production expenditures. The film incentives package applies to projects ranging from theatrical features to TV, commercials, digital content and branded entertainment. The minimum threshold of $500,000 can be reached cumulatively, meaning that multiple commercials or pieces of branded content, for example, shot in Nevada during the course of the year can collectively qualify for the tax credit.
Eric Preiss, director of the Nevada Film Office, confirmed the decreased funding for the film incentives program. He noted that “all projects that have applied will still be honored and there will be no changes to any existing projects; the only effect is that there will be less total incentives available for future productions. The scope of the incentives remains the same; all previously qualified productions will still qualify, including commercials.”
Preiss added, “There are still funds left in our incentive program to be awarded and our approach will remain exactly the same.”
As earlier reported, among the first projects to tap into the Nevada program was Sony Pictures’ Paul Blart: Mall Cop 2.
To retain all its incentives, Tesla must spend at least $3.5 billion in Nevada within 10 years. Half of Tesla’s jobs must also go to Nevada residents, at both the factory which will employ an estimated more than 6,000 people, and for construction which should account for another 3,000 or so jobs. Per the legislation, Tesla will pay no property or payroll taxes for up to 10 years, and no local sales or use taxes for up to 20 years. The Tesla deal also includes another $195 million in Nevada tax credits.
