This Washington

Motion Picture Tax Exemption Sailing Through Legislature

By Andrew Calkins May 24, 2011

Liberals have lobbied hard for culture and arts program this session in Olympia. (Most recently, progressives pushed for the extension of the stadium taxes to fund local arts programs.)

But another big cause celebre for liberals this session was the effort to close tax loopholes.  But what happens when tax breaks go to fund the arts.  Case in point: a  bill sponsored by liberal heavyweight Sen. Jeanne Kohl-Welles (D-36, Seattle) that's quietly moving through the legislature to support local filmmaking.  Her legislation would expand and extend the state's motion picture competitiveness program. The program, started in 2006, provides B&O tax breaks to businesses who donate to a motion picture non-profit, which then administers grants to qualifying film operations here in Washington.

The cost to the tax payer: $7 million over the next biennium — though the house version cuts the statewide B&O exemption in half, to $3.5 million over two years.

The legislation has its share of Democratic cosponsors—including Sen. Scott White (D-46, Seattle) and Sen. Lisa Brown (D-3, Spokane), who have signed on to the Kohl-Welles bill. (Both Kohl-Welles and White signed on to the big Democratic bill that sought to close tax loopholes.)

Supporters of the filmmaking tax exemption are largely (and successfully) making the claim that the bill pays back on its investment through jobs and economic activity. The Joint Legislative Audit and Review Committee (JLARC) determined, for instance, that the film companies who received funds in 2009 had a total economic impact on the state of $72 million.

That's precisely the kind of argument supporters of tax expenditure reform, like Rep. Bob Hasegawa (D-11, Renton) and Rep. Reuven Carlyle (D-34, Queen Anne), have been arguing for all session, but hasn't gained much steam.

Kohl-Welles' legislation, which is one of a few revenue decreases accounted for in the final 2011-2013 budget proposal, is queued up for a final floor vote in the house.

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