Audit Uncovers Serious Problems with Film Incentives

A new audit is highly critical of the incentives the state gives to the film and TV industry. The comptroller’s report questions more than $25 million dollars in payouts and how that money was distributed.

From 2006 until last year, filmmakers could apply to have some of their production expenses reimbursed, as long as they used Tennessee vendors. But the audit found that the state handed out more than $ 25 million dollars in expenses that didn’t qualify.

At a legislative hearing today, Republican State Senator Ferrell Haile asked the Department of Economic and Community Development’s Will Alexander if there’s any hope of getting that money back.

“But how are we progressing to go back and look at this and try to reclaim this? I’ve had a conversation with the general counsel. We continue to look into this to figure out what kind of rights the state might have and ECD will play a role in that.”

The audit also found abuse of a tax break for film companies that re-located to Tennessee. In some cases, the companies never moved to the state or only set up empty offices. The comptroller’s report only looked at a small sample of films. Alexander says the state has hired an accounting firm to audit every single production that received the incentives.

Those include the movies Hannah Montana and Country Strong, as well as the ABC series Nashville.

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