Georgia finally passed the long overdue House Bill 155, or more commonly known as the Georgia Music Investment Act. Governor Nathan Deal signed the bill on May 8, 2017, and it went into effect July 1, 2017. Many find the delay in the incentive surprising, especially when one considers the enormity of Georgia’s music business. For many Georgia musicians, this is a very exciting and significant moment because the Act is the first specifically targeted music incentive in Georgia.
The bill focuses on three major initiatives, which are live productions, scores, and recording. Eligibility for the incentives under the Act requires a production company to meet a threshold of $500,000 for live performance rehearsals, $250,000 for stand-alone scoring projects and $100,000 for recorded music performances. The Georgia music industry predicts this will create a great number of jobs for residents of Georgia. Touring operations hire hundreds of individuals to work as members of the production and there are greater benefits for hiring residents of Georgia according to the Act. The bill is also designed to attract larger budget music production projects by providing a tax credit of fifteen (15%) to twenty percent (20%) as an incentive for projects that spend a minimum of $100,000 annually.
If musicians meet the requirements above, the bill provides for a fifteen percent (15%) refundable tax credits to music groups and tours. If production occurs in rural parts of the state producers may qualify for an additional five percent (5%) refundable tax credit. Georgia Music Partners, the Atlanta Chapter of the National Academy of Recording, and many other groups have advocated for music incentives for over seven (7) years. Now, Georgia has finally taken action. Refundable tax credits provide greater benefits than nonrefundable tax credits, such as the Georgia film credits, because all tax filers can claim the tax credit whether or not they owe income taxes. The amount of the tax credit does not vary by tax bracket. A refundable tax credit is subtracted from yearly tax liability, which may reduce tax liability below zero. The difference between taxes due and the refundable tax credit is received by the filer as a tax refund.
Georgia talent leaving the state for cities with thriving music industries, such as Nashville, has been an ongoing issue. Local musicians expect the Act’s incentives to keep Georgia artists in-state and boost Georgia’s music market to a level rivaling that of Nashville and Austin. Not only will the Act retain current artists, but he Georgia legislature expects the Act to create thousands of new industry jobs and provide an environment conducive to new artist growth. Currently, Georgia music is estimated to generate over $3 billion in annual revenue. This is an exciting time for Georgia’s music industry as well as its economy.
Written By Mark Buckland, GLA Summer Extern 2017