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Minnesota Legislature

Committee considers offering tax credits to Hollywood

Melodie Bahan, executive director of Minnesota Film and Television, testifies for HF2508, which would provide a 25 percent refundable tax credit to film productions in Minnesota. Rep. Kelly Fenton, right, is the sponsor. Photo by Paul Battaglia

The film industry has evolved significantly since “The Mighty Ducks” and “Grumpy Old Men” were filmed in Minnesota in the 1990s. As a result, lawmakers are aiming to incentivize film studios to bring future projects to the state.

Sponsored by Rep. Kelly Fenton (R-Woodbury), HF2508 would offer an income and corporate tax credit to film productions. The bill was held over by the House Taxes Committee Wednesday for possible omnibus bill inclusion. Its companion, SF2179, sponsored by Karin Housley (R-St. Mary’s Point), awaits action by the Senate Taxes Committee.

The bill would provide a refundable tax credit equal to 25 percent of film production costs. Under the Film Production Jobs Program statute, “production costs” cover a broad range of activities including cast and crew salaries, set construction and operations, rental of facilities and equipment, technical services and post-production costs.

The tax credit would apply to television or Internet pilots, programs, series, documentaries, music videos and television commercials. The credit would not apply to news, weather, current events, talk shows, sports coverage or award shows.

Melodie Bahan, executive director of the Minnesota Film and Television commission, said there is a definite interest in Minnesota filming, which she claims benefits local businesses the film crews patronize and state tourism efforts.

“We know from discussions as recent as last week that there is desire to locate film and TV productions in Minnesota,” Bahan said. “We have the locations, the seasons, the professional crew and the talent, but we need to create a competitive, stable program that allows companies like Disney and Netflix to invest their production dollars here.”

Rep. Joe McDonald (R-Delano) asked if there are provisions in the bill that would require productions to hire local talent.

“Even Explore Minnesota has done filming in Minnesota and used out-of-state vendors. Can you imagine that?” McDonald said.

Bahan said the tax credit only applies to spending that is part of the local economy.

“The spending that qualifies for the incentive program is only Minnesota spending,” Bahan said. “That’s Minnesota residents, Minnesota vendors, Minnesota businesses.”

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