Arizona tax incentive for movie productions

TEMPE, AZ — “Lights, camera, action…”

There’s a lot more than that happening at Sun Studios of Arizona in Tempe, a full-service production facility that films, edits, and distributes everything from feature films, commercials, and even audio books.

“It literally is a one-stop-shop,” explains Darrin Ramage, owner of Sun Studios.

The facility rivals any studio you would see in Hollywood; they can produce music albums, they can record music videos, they can create soundtracks — now, they just need the business.

Ramage says that business is literally flying over Arizona’s head right now and is going to other states like New Mexico, Louisiana, and Georgia, all because of their tax incentive packages for studios and film companies.

Arizona’s previous package went dark more than a decade ago, but now, some state lawmakers are trying to change that.

Under Senate Bill 1708, the state would hand out as much as $150 million in tax credits each year to production companies that are willing to ditch Hollywood, or any other location, and film here in Arizona.

To earn the tax credit, the companies would have to film at a qualified studio in Arizona. If a movie was filmed on location, the pre-production, post-production, and editing would need to happen in Arizona. There would also be added incentives for companies that hire and use Arizona-based workers and crew members.

Supporters like Ramage say it would help create more film infrastructure like studios to produce even more content. It would also increase other businesses like hotels and restaurants and would, in turn, create more jobs.

Some people argue the bill would turn into a box office flop.

Opponents worry it would be like cutting a check to Hollywood — and there’s concern the state could actually lose money on the deal, especially in the first few years, according to one economic analysis.

Others argue it’s not fair to single out the film industry when other businesses are still struggling to rebound from the pandemic.

“Think of the thousands of small businesses who had shut down during COVID who would love to offset the tax liabilities that they have. While we are busy crafting targeted programs to attract this industry, many of those small businesses will never come back,” he explained Aimee Yentes, Vice President of the Arizona Free Enterprise Club at a February Senate Appropriations Committee where the bill was being discussed.

Ramage tells ABC15 this bill is what is needed to help Arizona studios stay alive.

ABC15: Have you had moments in the last six years of owning your studios where it’s been difficult to make ends meet?

Ramage: It’s been almost impossible.

Ramage went on to say this tax incentive package is what’s needed to attract bigger, more long-term projects.

“We can do little commercials and music videos, but we are not getting the big business or the long-term business…A feature film comes in and they’re in for a month or six weeks. We’re not getting those The deals we’re getting now are maybe one, two or three days.”

SB 1708 passed in the Senate with bipartisan support and has since moved onto the House where it currently sits in the committee. If it passes, it will head to Governor Doug Ducey’s desk for a signature.

To read the full bill, head to https://apps.azleg.gov/BillStatus/BillOverview/77703?=Session525

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