Postproduction tax credit passed as Georgia’s film industry recovers

This credit is separate from — though complementary to — Georgia’s uncapped film tax credit, the state’s largest corporate incentive.

The postproduction credit was enacted in 2018 and sunset in 2022. If signed into law, the reinstated credit would go into effect January 2026 and sunset in 2031. —

Postproduction describes all tasks completed after a movie, television show or other piece of media finishes shooting, such as editing, color grading, audio mixing and visual effects. It’s an integral part of production and can often take much longer than the time it takes to shoot the project.

The bill is a win for Georgia’s film industry, which suffered a decline in production during the writers and actors strikes in 2023 and has yet to rebound to its previous pace. This past fiscal year, productions in Georgia spent $2.6 billion, down 37% from the previous year. Excluding 2020, when production stopped for months because of the COVID-19 pandemic, spending between July 1, 2023, and June 30, 2024, was the weakest the state has seen since fiscal year 2016.

This is happening in other major American film markets too, including Hollywood.

A number of reasons are to blame, one being studios’ and streamers’ desire to save costs after years of spending on content to build out their libraries. Studios are also facing significant losses at the box office and are having to deal with inflation. They’re green-lighting fewer projects, canceling programs and laying off employees, leaving thousands of industry professionals out of work and soundstages across the country empty.

Studios are also offshoring production and postproduction as they chase supersized subsidies and cheaper labor, particularly for higher-budget projects. Film hubs including Georgia are losing out on business to the United Kingdom and eastern European nations such as Hungary or the Czech Republic. It’s not uncommon for a project to shoot in Los Angeles but complete postproduction work in London or Vancouver, Canada.

During a Georgia Senate Economic Development and Tourism Committee hearing last month, Honnie Korngold, a producer trying to get a studio off the ground in South Georgia, said the postproduction credit would “attract new producers, new studios, (and) get them to stay in Georgia long term and ultimately build an industry that right now is really struggling.”

Lobbyists and other stakeholders have been anxious the entire session to ensure Georgia’s larger film tax credit remains untouched. Last session, lawmakers tried to pass a measure to cap the amount of credits that could be bought and sold each year, but it never reached a final vote.

Production in Georgia isn’t at a standstill. According to the Georgia Film Office, at least 24 productions are filming in the state.

Nine are reality television shows, nine are scripted television series and six are movies. But it’s about half the number of projects filming in April of last year, which was 43, and less than April 2023, which was 36.

Georgia and other states with film incentives have been working to attract production back to their states by improving their credits or streamlining administrative processes. California lawmakers filed a bill to increase to 35% the amount of costs that productions filming in the Los Angeles area can receive back from the state. In March, Georgia updated the audit process required of all tax credit-eligible film and television productions to make the process faster and less expensive.

The film industry of today is driven by incentives. Producers will likely go where they can get the biggest bang for their buck, even if the location of their story is on the other side of the country.

Under this postproduction credit, eligible expenditures include editing and special effects services, film processing, facility and equipment rentals, leased vehicles and lodging, among several others. Postproduction companies can qualify even if they are working on projects that shot in other states.

Greg Crawford, a 30-year-plus sound designer with Smart Post Sound, said the credit will be a boon for the industry. Postproduction services are available in multiple locations around the state, so having the incentive would encourage more producers to take advantage of the credit.

“I think it would incentivize people to want to then move the entire production into the state of Georgia, starting with the writers room,” Crawford said. “You start adding up the color, audio, editorial — all that can really add up to a significant amount of money.”