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Bill would give film companies 25 percent tax rebates in Nevada

CARSON CITY — Motion picture industry representatives pleaded with Assembly Taxation Committee members Thursday to adopt a bill that would give film companies 25 percent tax rebates.

They insisted it would help Nevada gain the movies and commercials — and the business they bring — that it now loses to states such as New Mexico.

But after a two-hour hearing, members of the Taxation Committee voted to refer the bill, without a recommendation to approve or reject, to the Assembly Ways and Means Committee. That committee must consider the bill because with passage, it might have a negative effect on state budget revenues.

While no one testified against the bill, committee Chairwoman Marilyn Kirkpatrick, D-North Las Vegas, and others said they wanted more assurances that Nevada would benefit from the rebates.

“I am nervous about making it so open,” Kirkpatrick said. “We need a sunset (a date when rebates expire) to make sure it creates jobs.”

“We may not be only giving away the farm but the studio,” quipped Assemblyman John Ellison, R-Elko.

During the hearing, J.R. Reid, owner of a Las Vegas film lighting company, said 44 states offer tax breaks to film companies. Even California, the motion picture capital, offers tax breaks to movie companies.

Because Nevada offers nothing, it loses movies to places such as New Mexico and Louisiana, he and many other witnesses testified.

James Clark, a film agent who specializes in railroad scenes, said he worked on 36 films in Nevada more than 20 years ago but rarely uses the state now because of the lack of tax incentives.

“Except for something they might need in Las Vegas, they (film companies) don’t think of Nevada,” he said.

The value of what Nevada receives from motion picture and commercial productions dropped to $81 million last year, down from $155 million in 2000.

Reid and other members of the Nevada Film Tax Incentive Task Force want legislators to give film companies a 25 percent rebate on their labor, taxes, rentals, lodging, food and other costs.

Under Assembly Bill 506, the Nevada Commission on Economic Development would determine what rebates film companies would receive.

Reid estimated that giving out $50 million in rebates a year might boost film production in Nevada by $200 million a year.

He said the state would receive
$76 million in additional taxes a year through increased business caused by the rebate program.

Joshua Cohen, a Las Vegas film producer and member of the task force, said the No. 1 question film companies ask today is, “Do you have incentives?”

According to the task force study, “The Hangover,” a popular movie about Las Vegas, contributed to an annual
8.5 percent increase in visitor volume and 10.5 percent annual increase in Clark County gaming revenue.

Passage of the bill would lead to a
1.5 percent increase in Nevada tourism, according to the study.

But Frank Woodbeck, director of Las Vegas operations for the Economic Development Commission, said one “cannot estimate accurately” how much passage of the bill would affect Nevada tourism.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

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