Michigan Film Tax Credit Gives Boost To Detroit

by Leroy Baker, Tax-News.com, New York

17 April 2009

A USD146m film television production complex has been won for the Detroit area as a result of Michigan's generous tax incentives for the entertainment industry and the local pool of skilled and unskilled labour. The region has one of the country's highest unemployment rates.

The construction of the complex in a suburb of Detroit should commence this autumn after the approval this week of a state tax credit worth USD2.8m over 12 years for a USD146m movie, television and new media studio and retail/residential project on 104 acres in Allen Park. The initiator of the project, Unity Studios Inc. of California, does post-production work on several popular television shows.

The studio project will create 83 direct jobs, and will include a residential program to retrain workers for jobs in the entertainment production industry. Unity Studios is the latest to capitalize on studio demand being created by the state’s deep incentives for the entertainment industry. A number of studio projects are in the works — including the USD40m 23rd Street Studios and USD86m Wonderstruck Studios projects in Detroit and a USD70m plan for the old General Motors Corp. Centerpoint complex in Pontiac — to take advantage of the year-old incentives that has the state reimbursing filmmaker’s qualified expenses in Michigan up to 4%.

For the future local politicians have expressed their aim to cap the tax credit for film productions but expand incentives for those who build permanent film infrastructure. The film tax credits are projected to reduce Michigan Business Tax receipts by USD127m this fiscal year, a year in which tax revenues generally are falling at a precipitous pace. However 2,800 jobs have been created and USD65.4m has been spent on film productions in the state, according to an economic analysis by the Michigan Film Office.

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