CHARLESTON, W.Va. — Gov. Jim Justice says he has signed a bill eliminating West Virginia film tax credits.
“We recognized that the West Virginia Film Tax Credit program was not performing the way that it should and the right thing to do was move in another direction,” Justice stated in a news release.
“Tourism has advised us without question that these funds will be better spent somewhere else.”
The House of Delegates voted on Friday to eliminate the tax credit, following a vote by the Senate to do so.
Republicans described the $5 million annual cap on film tax credits as being an important building block in the state budget that could now be used for other priorities.
They also said the tax credit has not delivered enough bang for the buck.
Democrats contended the film tax credit could be improved, that it has had a positive economic stimulus effect and that its results have a positive effect on the branding of the state.
The West Virginia Film Industry Investment Act was established in 2007 to encourage economic development through motion picture and other commercial film and audio projects.
The act allows eligible film production companies to receive nonrefundable tax credits for direct and postproduction expenditures made in West Virginia or incurred with a West Virginia vendor. The credits also may be transferrable.
Last year, the Legislature eliminated the State Film Office, folding in its responsibilities with the Division of Tourism.
State Tourism Director Chelsea Ruby spoke before several committees this year, describing acceptance of doing away with the credit. She has described it as a “race to the bottom,” saying such credits are only paying off with states like Georgia that are willing to put forth significant resources.
Ruby has said the state can pursue other ways to promote the film industry in West Virginia, as opportunities present themselves.
During last month’s interim meetings, the Legislative Auditor’s staff recommended doing away with the credits. “The film tax credit has produced minimal economic benefit to West Virginia,” the Legislative Auditor’s report concluded.
The economic impact of the film tax credit program has been about $8.6 million over its 10-year existence, or less than $1 million annually on average, auditors wrote.
Furthermore, auditors wrote, right now West Virginia lacks a strong incentive program, a skilled workforce, and the infrastructure needed to attract large film productions.
MORE: Read the report about the West Virginia film tax credit.