Senate bills 1346 and 1347, introduced in late January, are designed to bring Arizona up to speed with other southwestern states, including New Mexico, which enacted several tax exemptions and incentives during the end of 2002.
The New Mexican incentives encouraged massive growth in entertainment industry money spent within the state, raising it from $8 million during 2002 to roughly $80 million in 2003.
According to supporters within the senate, the Arizona bills would be a huge boon to the state’s current $21.9 million film industry, which contributed over $107 million in direct economic activity throughout the state during 2003.
“Any options to help the film business in Arizona are welcomed,” said Michele Regan, chair of the House Commerce Committee. “We are missing a big opportunity by letting films slip away from us and being shot in New Mexico or Nevada.”
However, on Thursday, the Senate Finance Committee amended both of the proposed statutes to prohibit “obscene” movies from taking advantage of the tax break.
According to the amendments referenced in the legislature’s record, the changes would “deny a certificate under this subsection for any production that would constitute an obscene motion picture film or obscene pictorial publication.”
The changes to the bill would deny adult companies the ability to receive a 10 percent credit on films that cost more than $100,000 to produce, 15 percent on films that cost more than $5 million to produce, and 20 percent on films that cost more than $10 million.
The exclusion of adult films from credits received by entertainment industry productions is consistent with similar laws enacted in Canada, where adult content is also excluded from receiving government subsidies.
New Mexico also includes similar limitations, prohibiting filmmakers that produce moves “harmful to children” from receiving a 15 percent entertainment industry tax credit.