Both Georgia and non-Georgia-based companies can transfer the tax credit to a Georgia company, as long as the transferor recoups at least $.60 on the dollar. Unlike tax incentives that only affect the publisher and final consumer product, Georgia’s tax code qualifies even expenditures on editing, animation, coding, special effects, sound and more. The primary caveat is that these production expenses must be used in an entertainment product with commercial distribution beyond Georgia’s borders.
The actual incentive is a tax credit of nine percent of the base investment on in-state production. Eligibility is determined on a “per project” basis, and each project can count toward the $500,000 minimum investment per filing year. If the project employs Georgia residents, the company can get a credit for three percent of the aggregate payroll of all Georgia residents thus employed. Contract labor is eligible for only the nine percent based investment credit. In addition, companies who make the investment in designated Tier 1 and Tier 2 counties (like Atlanta’s Fulton County) are eligible for another three percent credit. A map showing Tier 1 and Tier 2 counties is available from the Georgia Department of Economic Development upon request.
According to Greg Torre, director of Georgia’s Film, Video & Music Office, this amendment to the tax code demonstrates Georgia’s commitment to the marriage of technology and entertainment. “We see interactive entertainment as a vital element in the entertainment
industry as a whole. Since Georgia has colleges and universities dedicated to cutting edge technology sitting alongside mainstays in the broadcast industry, this tax incentive seems an ideal way to highlight the fact that Georgia can be an incubator for new and exciting entertainment technology. All the resources are here. Now, we help publishers afford it.”
Georgia is already home to Blue Heat, a prolific developer of mobile phone games; GameTap, a pioneering network in providing video games through streaming technology; Kaneva, a 3D-game engine builder; Persuasive Games, a leading producer of public policy games; RoosterTeeth Productions, a production company at the forefront of Machinema (using video characters to make short films delivered via the World Wide Web); and Studiocom, developer of some of the largest advertiser-subsidized game and entertainment environments on the Internet. The growth of the Georgia Game Developers Association also shows the state’s rapid growth in interactive entertainment technology.