Will Hollywood keep coming to Kentucky?

Tax incentives bringing Hollywood films to Kentucky put on hold

LOUISVILLE, KY (WAVE) - Actor Rainn Wilson was recently in Kentucky filming a movie called “Don’t Tell a Soul.”

So was Robert Redford, Nicholas Cage, and Kelly McGillis, working on other projects. This is partly thanks to incentives that were being offered to filmmakers.

However, those in the business said recent changes mean Hollywood won’t be coming to Kentucky now.

A quiet estate in Oldham County was the location for the movie starring Wilson. The producer is Merry-Kay Poe, chairman of the Kentucky Film Commission and President of Unbridled Films. The Louisville resident has been hunting for a movie to film here.

"It’s extremely important to me. This is my home,” Poe said.

Poe helped advocate for the increase of tax incentives to get more films made in Kentucky - from a 20 percent refundable tax credit to 30 and 35 percent.

It worked.

In 2018, the Kentucky Film Office received more than 200 applications. They said about ten percent of those came to reality. In the last fiscal year $1.7 million in incentives were paid to productions. Mattie Ware said it’s made a huge difference for his lighting business.

"What’s happened with incentives brought in commercial and bigger features,” Ware said.

It also means the local industry has had to grow.

"Because of that, we have built one of the best crew bases. I’ve got a lot of them working for me now,” Poe said.

Of the 100 people working on the set of the movie “Don’t Tell A Soul,” about 60 of them are from Kentucky.

Costume Supervisor Tora Eff said without the incentives she wouldn’t be able to stay in her home state.

“It would mean I would have to relocate,” Eff said. “Honestly. It means a lot for films coming to the city.”

However in the last legislative session, the incentives were capped at $100 million per calendar year. More importantly, the credits were changed to non-refundable and non-transferable, making Kentucky the only place in the world where this is the case. This means there’s no way for companies outside of Kentucky to monetize the incentive.

"It means the way it was altered pretty much puts everything on hold,” Poe said. “Because we’re just not competitive the way it is now.”

Kentucky lawmakers said the incentives could be reviewed again.

"We do have to make sure that if we’re using taxpayer money we’re truly getting a return on that investment,” Democratic Senator Morgan McGarvey said.

It’s too early to know the type of impact the changes will have on the industry.

"We have to make sure we’re not funding films or commercials when we can’t adequately fund pensions and education,” Republican Senator Jason Nemes said.

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