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Arizona Senate votes to create tax credit to lure movie, TV producers

The state Senate voted Thursday to create up to $150 million in state tax credits to lure producers to make movies and television shows in Arizona.

The measure was approved with bipartisan support from lawmakers who said it would create jobs for people working directly on productions as well as the hotels, restaurants and other local businesses that support them.

“We’re missing a lot of really good economic activity and support and exposure for our tourism industry" by not offering tax credits to film producers, said Sen. Lela Alston, a Phoenix Democrat who supported the bill.

Film tax credits have become increasing popular in states looking to lure film producers from California. Supporters of creating an Arizona tax credit say it's hard to compete for lucrative productions against states with generous tax credits.

But Arizona has had a similar credit in the past, and it lost money. A 2009 report by state commerce officials said the 2008 tax credits designed to lure Hollywood producers to Arizona actually lost the state $6.3 million that year.

According to that study, the productions given credits generated 317 full-time jobs in the industry. Another 413 jobs were created indirectly by Arizona spending by filmmakers. All totaled, the report said, that generated about $2.3 million in additional state and local taxes. But Arizona gave out more than $8.6 million in credits to get that benefit. The state got rid of tax credits a decade ago.

Several Republican critics said the bill was an unnecessary giveaway to Hollywood production companies.

“You’re taking government funds and you're cutting a check to Hollywood, people who certainly are out of touch with the average citizen,” said Sen. Warren Petersen, a Gilbert Republican who voted against the bill.

The proposed Arizona tax credit would be fully refundable, meaning film producers could collect a tax refund even if they don't owe any taxes to the state.

The measure cleared the Senate in a 21-7 vote and goes next to the House.

Jill Ryan joined KJZZ in 2020 as a morning reporter, and she is currently a field correspondent and Morning Edition producer.