Multinationals Shoot Ads With State Film Tax Credits

02/14/24 • 15 min

State film tax credit programs are increasingly financing advertisements for some of the world’s largest consumer product companies, some of which subsequently sell the credits to other companies looking to reduce their state tax liabilities.

Twenty-eight states and Puerto Rico allow such incentives for production of commercials. Major companies, including McDonald’s Corp., Kellanova, and AbbVie Inc., receive these to promote products such as burgers, cereal, and prescription drugs. Tax credits are sometimes obtained by ad agencies or production companies, while in other cases the brands obtain them directly. And productions aren't always required to be filmed entirely within the jurisdiction offering the credit.

Some states allow recipients with minimal or no tax obligations to sell the credits for cash, enabling major corporations like Walmart Inc., Apple Inc., and Bank of America Corp. to buy them up and lower their state tax bills, despite having no involvement in the productions.

In this episode of Talking Tax, host David Schultz spoke with Bloomberg Tax reporter Angélica Serrano-Román about her recent deep dive into state film tax incentive programs, the companies receiving these benefits, and the buying and selling of credits.

Data obtained from Georgia, Illinois, New Jersey, and Puerto Rico, which provided insight for the Feb. 5 story, is now available on GitHub.

Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Data obtained from Georgia, Illinois, New Jersey, and Puerto Rico, which provided insight for the Feb. 5 story, is now available on GitHub.

Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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Here's What to Know as Tax Filing Season Kicks Off

More than 146 million individual tax returns are expected to be filed before the end of the 2024 tax filing season.

The IRS, with the help of the tens of billions of dollars in supplemental cash from the Democrats' 2022 tax-and-climate law, built up its call centers, expanded its online options, and is now offering more hours at its taxpayer assistance centers to help make a smoother tax filing season for taxpayers and tax professionals.

It also launched a controversial free agency-run filing tool for low- and moderate-income taxpayers filing simple returns, though access to the tool won't be more widely available to the general public until mid-March.

Bloomberg Tax reporter Erin Slowey spoke with Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals, about what's different this tax filing season, what's happening in Congress, and why taxpayers shouldn't rush to file once the season opens.

Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Next Episode

Taxing Digital Is Hard, Former State Tax Chief Says

For more than a decade, states have had to grapple with the challenge of taxing the digital economy. Peering into cyberspace, tax administrators were often left with more questions than answers. What online products and services should be taxed? How does a state source a virtual creation to a specific jurisdiction? Can states even tax digital products and services in the face of federal limits on discriminatory taxes on electronic commerce?

State tax authorities now have to answer these questions without Gil Brewer, who retired at the end of January from his position as assistant director of tax policy at the Washington State Department of Revenue and stepped down as chairman of the Multistate Tax Commission’s digital products work group. Brewer assisted with Washington’s pioneering efforts to equitably and efficiently tax digital goods and services dating back to 2009. He lobbied the tax commission in 2021 to launch an ambitious project aimed at uniform digital economy tax policies across the states.

On this episode of Talking Tax, Bloomberg Tax senior reporter Michael J. Bologna caught up with Brewer to discuss his career in tax, his views on state taxation of digital products, and the risks the states and taxpayers face if they fail to develop thoughtful and legally defensible policies taxing digital products and services.

Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.