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Motion-picture incentives deliver $4–6 in local activity per $1 awarded but return <35¢ in tax revenue, LFA finds
Summary
Legislative Fiscal Analyst and film commission data show motion‑picture incentives generate multiple dollars of local spending per dollar of incentive but recover only about 15–30¢ per dollar in tax receipts; committee discussion flagged program design choices and funding levels for rural incentives.
An Office of the Legislative Fiscal Analyst (LFA) review of Utah’s motion‑picture incentives found that productions receiving cash rebates or refundable tax credits typically generate about $4 to $6 in verified local economic activity for each dollar of incentive, and the state recovers roughly $0.15–$0.30 in tax revenue per dollar awarded.
Jared Gibbs, economist with the LFA, summarized the program’s structure and history: Utah has three principal incentive “pots” — a cash rebate account (established by House Bill 17 in 2005, with a $1 million ongoing appropriation), a general refundable film income‑tax credit (statutorily capped at $6.8 million ongoing), and a rural refundable credit created in 2021 (SB 49) and modified in 2024 (S.H.B. 78). The rural program in recent budgets included a $1 million ongoing appropriation plus $22 million in one‑time funding for fiscal 2025–26.
Gibbs explained how analysts evaluate “additionality” — the degree to which projects filmed in Utah occurred because of incentives rather than for non‑fiscal reasons (for example, unique scenery). He said the LFA’s verified “dollars left in the state” metric (companies’ actual local expenditures submitted to claim credits) generally matched producer estimates, and that the per‑dollar economic‑activity multiplier averaged about four to six dollars.
On direct tax returns, Gibbs said the program’s tax‑revenue payback ranged from roughly 15¢ to 30¢ per dollar of incentive depending on the year and mix of projects. He told the committee that policy options depend on the legislature’s priority: to maximize economic activity, to direct benefits specifically to rural communities, or to support cultural/brand objectives. Possible legislative actions include tightening or consolidating the three incentive buckets, converting refundable credits to nonrefundable credits, or reauthorizing the one‑time rural funding.
Committee members did not vote on changes and deferred further policy decisions. The LFA and Utah Film Commission provided data the committee requested for later consideration, and members asked staff to quantify the program’s rural economic impacts and to consider “but‑for” measures in future reporting.
