Richard Lindsey, the chairman of the House Education Appropriations Committee, said Wednesday that passage of the Entertainment Industry Incentive Act of 2008, which is designed to lure motion picture production to Alabama, is linked to passage of a 30 percent tax on proceeds from “adult telephone conversation” and “visual pornography.”
The tax incentives would be offered to production companies that incur between $500,000 and $10 million in production expenditures. The Senate legislation authorizes an income tax credit equal to 25 percent of production expenditures plus a credit on payroll paid to Alabama residents.
The legislation also would grant state sales and lodging tax exemptions to production companies that spend more than $150,000 in Alabama.
AEA Executive Secretary Paul Hubbert said the incentives will cost Alabama taxes that go to education.
“The revenue generated by adult entertainment would offset the loss in the first few years in the incentive tax,” Hubbert said. “People who buy Penthouse and people who buy Playboy magazine will pay the tax."
According to the Tuscaloosa News, the proposed legislation taxes visual pornography films, videos or other electronically distributed material, and also phone sex services like 900 numbers. It does not include adult magazines.
Lindsey announced he would not call for a vote on the film incentive bill or the pornography tax bill until this week.
