In 2018, West Virginia’s film tax credit was dead.
In 2022, long live the film tax credit.
Delegates today overwhelmingly voted to bring back the credit meant to lure film industry activity to West Virginia, after assurances by the bill’s sponsor, Dianna Graves, that she had put plenty of elbow grease into assuring it will work well.
“This bill brings it back better than ever,” said Graves, R-Kanawha.
House Bill 2096 was passed by an 87-11 vote today. It now goes to the state Senate for consideration.
It reverses — and also seeks to provide reassurance about — a repeal of the tax credit in 2018.
The elimination of the film tax credit occurred when West Virginia was facing budget shortfalls that required identifying spending the state could sacrifice. And at the same time, officials who examined the tax credit’s performance concluded it wasn’t paying off.
That year, 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 West Virginia Film Industry Investment Act was established in 2007 to encourage economic development through motion picture and other commercial film and audio projects.
Delegate Paul Espinosa, R-Jefferson, cited all that history today.
“You know that I’ve had some concerns with reinstituting this program, not because I’m not supportive of the film industry but because of the l a report that the previous program had significant deficiencies,” said Espinosa, who wound up voting for the bill.
Graves agreed that problems existed in the prior incarnation and that repealing it was the best course at the time.
“All kinds of improprieties were going on. There were projects that were marked dis qualified that shouldn’t have been. There was an actual fraud going on,” she said. “It was the right thing to do to kill it.”
But Graves described diligent work in exploring audit procedures and safeguards meant to strengthen the tax credit.
“There were certain things that were happening that I wanted to specifically exclude in the language of the bill, not just audit procedures. There were certain really egregious errors we allowed previously that we never should have allowed,” she said.
Espinosa followed up, “So you’re confident that the provisions in this bill will provide sufficient guard rails?”
Yes, Graves said. She also cited a sunset provision to give lawmakers the opportunity to review its performance again. “I’m going to be looking at it every year,” she said.
Graves explained that the bill would provide tax credits amounting to 27 percent of direct production expenditures in West Virginia. Companies would also be eligible for credits for post-production expenses actually incurred in West Virginia.
“I’m really excited about this bill,” said Delegate Kayla Young, D-Kanawha.
Delegate Daniel Linville, R-Cabell, also praised the bill as well as the work Graves put in.
“I can’t tell you the number of conversations I’ve had with her. I think she has sought to address concerns over the previously failed program,” Linville said.