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Senate bill could stunt Oklahoma film industry

State law has prevented an apocalypse in Tulsa, and Oklahoma film professionals are less than enthused.

Tulsa missed out when the makers of Steven Spielberg’s “Robopocalypse” — a film about a postapocalyptic Tulsa — chose Canada as a filming location over Tulsa because the Oklahoma Film Enhancement Rebate Program had reached its $5 million-per-year tax rebate cap.

Now, local filmmakers say a bill pending debate and a vote on the Oklahoma state Senate floor could spell the end of Oklahoma film altogether.

“We’re not just a bunch of petulant teenagers trying to rage against the machine,” Sean Patrick Eaton, chair of Professional Filmmakers of Oklahoma and a location manager based in Oklahoma City, said. “This is our industry.”

Eaton, an organizer of Save Oklahoma Film, said Oklahoma Senate Bill 1623 could soon cut tax rebate rates in half for filmmakers who choose to produce movies within the state.

The bill, authored by Sen. Mike Mazzei, R-Tulsa, and House co-author Rep. David Dank, R-Oklahoma City, would reduce the rebate program’s current 35 percent rebate offering to 17.5 percent.

Eaton said such a tax credit reduction is unacceptable.

By eliminating 45 special interest tax throwbacks that affect the film industry — like the state’s coal, wind energy and venture capitalism industries — the bill would lower the state income tax rate from 5.25 percent to 4.75 percent. Mazzei said these types of applicable tax incentive programs benefit only “a few people and not all Oklahomans.”


“My primary objective (with this bill) is to reduce state income taxes on all hardworking Oklahomans,” Mazzei said.

He said, ultimately, that the bill will pay for itself as the approximately $300 million decrease in expenditures on special interest tax throwbacks will balance out with the approximately $300 million decrease in revenue from income tax.

Sen. John Sparks, D-Norman, does not support SB 1623. Sparks said he disagrees that the reductions in the tax credit business incentive programs will offset the lost income tax collections.

“One example of that — a perfect example — is the film credit program,” Sparks said. “Say, for example, we collect $100 in income taxes from the people who are making films in Oklahoma, and we rebate one third of that back to them, so we collect $66. Without this program, those films won’t be made in Oklahoma — they’ll go to other states with aggressive programs such as Louisiana.”

When films go to other states, Sparks said, Oklahoma will collect “100 percent of zero” income tax from filmmakers.

“Mazzei’s plan indicates that we will have $33 more dollars because of the elimination of the credit,” Sparks said, referencing what would happen if both Senate bills became law. “But, in fact, we’ll be $66 short because those jobs will no longer be in the state of Oklahoma.

“The same effect will be seen in other industries to some degree. Some more, some less,” Sparks said.

Mazzei said it’s not up to the government to “pick winners and losers in the private sector.”

“You have to ask: Does a taxpayer subsidy create a true net economic benefit in the terms of long-term, high-paying jobs that raise the average income per worker in Oklahoma?” Mazzei said. “Unfortunately, the film rebate program doesn’t meet that standard. We just really have to zero the dollars in on where the taxpayers can get the biggest bang for their buck.”

Although Mazzei said the film industry provides primarily short-term jobs, Sparks said he’s concerned about the message this type of legislation sends to the business community.

“I’m concerned about the elimination of any program in which businesses have made business decisions based on those tax parameters,” Sparks said. “In effect, we’re creating a bait-and-switch.”

He said this type of “bait-and-switch” leaves other businesses uninterested in coming to Oklahoma because the state’s word isn’t reliable.

He said it would be better to grandfather-in some of these programs than to do away with them altogether, damaging relationships with businesses, as discouraging outside firms from coming into the state is ultimately “more detrimental than any short-term revenue losses.”

Eaton said continuation of the tax rebates for Oklahoma filmmakers, though difficult to analyze, helps many Oklahomans.

The “three-for-one-dollar return” granted to Oklahoma filmmakers, Eaton said, helps producers, director and film crew members, as well as local hotels, restaurants and stores that film professionals patronize. This “trickle up” theory will ultimately profit the state through sales taxes, he said.

Mazzei said he hasn’t seen any evidence that sales tax generated from Oklahoma film projects “comes anywhere near the $5 million that the taxpayers are investing in the film industry.” But Eaton said the tax credit program ultimately supports jobs.

It brings movies — ones that could very well film elsewhere, like “Robopocalyspe” — to Oklahoma, he said.

“Contrary to conventional wisdom at the capitol, these films will not necessarily come here just because the movie is set in Oklahoma,” Eaton said. “We all know how movie magic works.”

Ultimately, he said, he’s hoping for a line-item repeal of the relevant items, and he’s also hoping that the tax credit program will expand because “it’s not just Hollywood fat cats” that are benefiting, “it’s us” — Oklahoma film professionals.


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