Tax Credit Will Encourage New Spending and Job Growth in the North Star State

Duluth, MN (July 7, 2021) – After intense budget discussions and negotiations, the 2021 Omnibus Tax Bill was recently approved by both the House and Senate, and Governor Tim Walz signed on July 1.  The bill includes a Minnesota Film Production Tax Credit that creates a transferable tax credit of up to 25% on qualified in-state expenditures for TV/film production. Minnesota appropriates zero dollars on this program as the credits are not used until a production company spends money here in the state – up to approximately $5 million a year – paying all of the applicable taxes on their spending. This transferable tax credit will provide strong encouragement to the film and TV industry, as it begins to ramp up post-pandemic production, to bring those productions and resulting jobs to Minnesota, immediately helping to revive small businesses and grow middle-class jobs across the state.

“We are pleased that Gov. Walz and the Legislature recognize the potential economic benefits of the production industry,” said Melodie Bahan, Executive Director of MN Film & TV. “We’re particularly grateful to Rep. Dave Lislegard for his passionate advocacy on behalf of Minnesota’s production workers.” 

St. Louis County recently passed a production incentive program that has already resulted in an injection of money into the economy.   “Two smaller projects have already taken advantage of the incentives and at least 3 other projects are in various stages of certifying to shoot in the county in 2021” says Upper Midwest Film Office’s Riki McManus, Chief Production Officer.  “We’ve had an influx of serious inquiries since production companies have heard of the tax credit.  They specifically have changed their production plans because of the incentive, and these are much larger productions. That means larger budgets and larger local spend.  Without the tax credit, they would not consider shooting here and we would simply lose out on that injection of cash into the economy.”  

Mike Jugovich, Chair of the St. Louis County Board and former Chisholm Mayor, has seen the impact a film can have on a community: “The economic impact created by a film production is incredible. Our Main Street was full of activity with local merchants getting a much-needed boost in sales.”

“We expect that the combination of the County incentive and the State tax credit will offer Northeastern Minnesota a real opportunity to increase film production across the region.” Said St. Louis County Board Member Frank Jewell. 

There was strong support across Northeastern Minnesota for the film incentive, along with the support of MN Film & TV and SAG-AFTRA the House and Senate bills included supportive testimony in both chambers from labor/union leaders including IATSE Local 490, Teamsters Joint Council 32, and the Directors Guild of America. Emily Larson, Mayor of Duluth, testified about that city’s positive experience with film projects, noting that “Luring film and TV production is valuable to states and regions because production creates good jobs and injects money into the economy. [It] also brings visibility… increasing tourism and expanding sales tax for cities, counties, and the entire state.”

“American film and television content is among the most in-demand products made anywhere in the world, and that demand has never been higher,” said SAG-AFTRA National Executive Director Duncan Crabtree-Ireland. “Production leads to the creation of many jobs beyond the set: from hospitality workers, drivers and the building trades, the spillover benefits reach far beyond the industry itself. With the passage of this tax incentive bill, the state of Minnesota has claimed its place in this growing industry. SAG-AFTRA sincerely appreciates the efforts of Gov. Walz, Minnesota legislators, industry allies in the state and, most importantly, our own hardworking SAG-AFTRA members who never gave up in their fight for this incentive”

A recent report by the Motion Picture Association of America (MPAA) revealed that the highly labor-intensive film/TV industry is responsible for creating 2.6 million jobs nationwide. Two-thirds of those jobs were in indirect industries such as hospitality, transportation, and the construction/building trades. IATSE rep Brian Simpson testified that film/TV production “is like modern-day manufacturing and can only be done by real people working real middle-class jobs. Due to competition from other states [with tax incentives] and Canada, Minnesota has been exporting these jobs for at least 20 years now, but we can bring this back.” 

Of the more than 30 states that offer some form of tax incentive, several states have realized substantial benefits from similar production tax credits. The first season of the Hulu series “Castle Rock,” shot in Massachusetts, created 1,026 jobs and generated $69 million in economic activity. Each $1 of tax credit generated an estimated $4.73 in economic activity in the state. During their twelve-month production period “Castle Rock” expenditures for hotels and motels, including casino hotels were $914,000. The numbers were even more dramatic in Utah, where that ratio was $14 in new state GDP for every $1 of tax credit issued. 

Passage of this bill will bring potential for millions to be injected into the state’s economy yearly.  Production teams are actively engaged in finding locations for the backlog of on hold productions.  Minnesota Rep. Dave Lislegard, who originally introduced the Film Production Tax Credit bill, and who had experienced the benefits of film production first-hand when he was cast as a local actor in the 2005 film “North Country,” shot partially on the Iron Range, noted “An incentive program like a film tax credit is the only way to build this thriving industry and allow it to be sustainable. This is truly a ‘but for’ proposal. Without a tax credit they will not come.”