Some fear Hawaii’s film industry is in jeopardy thanks to tax credit cap

HONOLULU (HawaiiNewsNow) - It's no secret that Hawaii's film industry is thriving with some of Hollywood's biggest productions from “Jurassic World: Fallen Kingdom” and "Jumanji: Welcome to the Jungle” to big budget TV series like "Hawaii Five-0" and "Magnum P.I."

But some say the state's newly imposed $35 million per year cap on the tax credits is causing producers to go elsewhere and is putting Hawaii's film industry in jeopardy.

The state's film tax credit program refunds production companies a portion of what they spend to film in the islands.

On Wednesday, Senate Bill 33 and Senate Bill 365 were heard in the House Finance Committee. The bills would change the current cap.

“We are looking at whether it is time for us to increase the cap amount or what is the reasonable amount that the state can afford,” said Rep. Sylvia Luke, House Finance Committee Chair.

SB33 passed with amendments and SB365 passed unamended. It now goes to the entire House for a vote. If that passes, the House and the Senate will then negotiate the differences and determine what the cap amount would be.

But some say the cap should be abolished entirely.

"On one side of the equation, they are looking at state revenue which is GE tax and Use tax which is four percent and paying out the rebate which is 20-percent. So, in simple terms, it's a negative 16-percent loss to the state. What they're not looking at, in my opinion, is economic impact over the whole economy," Irish Barber said.

Barber is a business representative at Hawaii labor union IATSE Local 665. She said Major Studios and other projects spent $477 million in expenditures in Hawaii last year which is equivalent to $825 million in economic impact.

[Read more: As Hawaii’s film industry thrives, some fear tax credit cap could put it in jeopardy]

Vans Stevenson, with Motion Picture Association of America flew in from Washington D.C. to testify on the bills. He said Hawaii has proven to be an attractive location for television and motion picture production companies because of its landscape and also wants the cap to go away.

“Our companies, the major motion picture studios and television companies are very interested in doing more production in Hawaii,” Stevenson said. “And to do that today, you have to have a competitive production incentive program and Hawaii has a productive incentive program in place, but it needs to be more competitive."

Motion Picture Association of America members include Disney, Fox, Netflix, Paramount, NBC Universal, Sony Pictures, Warner Bros, and CBS.

Hawai'i Teamsters Government Affairs Liaison Cody Sula said in addition to the tremendous economic impacts, it provides hundreds of local job opportunities.

“CBS has two shows, ‘Hawaii Five-0’ and ‘Magnum P.I.’ Netflix announced that they’re going to be filming over 500 shows a year and they want to do some here and we already have one filming here currently and we just want to keep it open and friendly so these guys will come back and keep our people working,” said Sula.

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