Equilibrium

Nov 26

Super-Economics? How Marvel Movies Impact Georgia’s Economy

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By Alina Lee

This summer, Georgia Tech students watched with curiosity as their familiar classroom buildings were retrofitted into elaborate movie sets. Students speculated that production for  “Captain America: Brave New World”, which is set to release in February 2025 and was reportedly being shot in Atlanta, had come to campus. While the film’s identity is unconfirmed, the patriotic super soldier’s story would be just one of many that Marvel has shot in the Peach State. Other films include “Avengers: Infinity War” and “Avengers: Endgame”, two of the highest-grossing films of all time, as well as “Black Panther”, “Ant-Man”, “Spider-Man: Homecoming”, and “Guardians of the Galaxy Vol.2”.

Images from r/marvelstudios

What is the secret to Georgia’s MCU connection? The generous tax credit the state gives to production companies. 

The state offers a 20% income tax credit for production companies that spend at least $500,000 on qualified productions in the state. Projects showcasing a “Made in Georgia” logo can earn an additional 10%. Unlike other states, such as California and New York, which also tout generous film tax incentive programs, Georgia does not cap the amount of credit granted, making it particularly attractive to filmmakers.

Thus, it isn’t just the folks at Marvel Studios taking advantage. Since its establishment in 2005, the incentive has brought countless blockbuster films to the state and is responsible for the creation of numerous movie studios, infrastructure projects, tourism business, and thousands of jobs for Georgians, all of which have led to Georgia being dubbed the “Hollywood of the South” or “Y’allywood”. 

In recent years, however, the true extent of these benefits has been a subject of debate, notably between the film industry and state tax auditors. 

A study by Olsberg SPI, commissioned by the Georgia Screen Entertainment Coalition, claims the tax credit generates $6.30 for every dollar spent, contributing $8.55 billion to Georgia’s economy in 2022 and supporting nearly 60,000 jobs. In contrast, a 2023 Georgia State University audit argues the program results in $1 billion in lost state tax revenue annually, predicting only a 19 cent return per dollar in the 2024 fiscal year.

With the growing costs to the state in mind, legislators have attempted to tighten the ability for companies to claim these credits. This year, a bill that would have capped the incentive was ultimately killed in the state Senate. In 2022, a similar bill also failed to pass. 

“As the industry has flourished, so have the associated costs to our state revenues,” said Rep. Clint Crowe, a Republican from Jackson and a supporter of the bill. “It is imperative that we implement measures to safeguard our fiscal stability while preserving the attractiveness of our incentive program.”

Opponents of the 2024 bill had concerns that capping the credit would cause companies to take their business elsewhere.  

“If it’s not broke, don’t try to fix it,” said Rep. Long Tran-D, Dunwoody. “[Georgia’s] not just competing with other states, we’re competing globally, and this industry is rapidly changing.”

In the end, both bills failed to pass, leaving the tax credit program unchanged for now. However, the 2024 bill proposed measures that could have bridged the gap between the film industry and state officials by ensuring more of the credit’s benefits stay within Georgia. Provisions that were outlined in the bill, like requiring crews to include at least 50% Georgia residents, sourcing half of all vendors from Georgia-based companies, or locating production in counties where few movies have been filmed, could have tied the incentive more directly to local economic growth, maximizing its impact for Georgia workers and businesses. In 2020, the state introduced auditing requirements for the credit to improve compliance, but further steps to ensure these benefits remain in the state could add even greater value.

Beyond its measurable economic returns, the film industry has had far-reaching effects on Georgia’s cultural identity. Productions not only bring jobs and investments to the state, but also elevate Georgia’s profile as a hub for talent and innovation. They attract creative professionals, boost tourism, and enhance the state’s reputation on a global scale. This growth has firmly established Georgia as a destination for economic opportunity and creativity.

For now, Georgia’s tax credit program continues to fuel the state’s transformation into a global leader in film production. While debates over its fiscal impact persist, the program has undeniably shaped Georgia’s economy, culture, and reputation. With its doors open to the Marvel universe and beyond, Georgia remains in the spotlight as a creative and economic powerhouse in the industry.