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Mark Robyn &
State film tax incentives have exploded in popularity
in the last decade.1 in 2000, only three states offered
the subsidies. By 2010, the number of states offering
incentives had peaked at 40. as in many states, film
subsidies in alaska have been credited with bringing
to the state the economic activity spurred by several
productions.2 However, the commonly cited ben-
efits of film subsidies are often overstated and fail to
take into account offsetting economic effects. this
paper will examine the common arguments for film
incentives, focusing both on general arguments and
arguments specific to alaska. We will address the
• Can the program make the industry able to sustain
itself in the long-term, even when subsidies are cut?
• Do the subsidies distort the economy?
• Does the program reduce unemployment, contrib-
ute to economic output, and add revenues to the
• Is the program consistent with free speech and an
unhampered marketplace of ideas?
Film incentives can be in the form of tax credits,
tax rebates, grants, or exemptions. alaska’s subsidy
is structured as a tax credit, a type of tax benefit
which reduces a company’s tax liability dollar for
dollar. production companies typically must spend
at least a certain amount in the state to qualify. in
many states, the tax credits are refundable, mean-
ing that if the credit exceeds the liability the state
Movie Production Incentives in
the Last Frontier
1 Will luther, Movie Production Incentives: Blockbuster Support for Lackluster Policy, tax Foundation Special Report No. 173, Jan. 2010.
2 For a succinct statement of the perceived benefits and accomplishments of the program, see Susan Bell, Lights and Cameras of Hollywood Bring Opportunity for Alaskans,
Alaska Dispatch, Jan. 6, 2011.
• Film tax credits cost states revenue and require either higher taxes or lower government spending elsewhere.