Illinois Film Tax Credit Has Significant Impact for State

The Illinois Production Alliance today unveiled its Economic Impact Study of the Illinois Film Production Services Tax Credit, the first-ever study measuring the economic impacts of film, television, and commercial productions in the state. The report, conducted by international screen sector consultancy Olsberg SPI, demonstrates that the Illinois tax credit has been a key driver of economic activity and jobs and that it has a significant positive impact on attracting productions that would not otherwise have been filmed in the state. 

“Our film economy in Illinois is booming, and that is reflected not only in the demand we see from projects to film here, but in the quality of those productions,” said Illinois Governor JB Pritzker. “The Film Production Services Tax Credit has helped Illinois develop a creative workforce that is second to none in the talent, dedication, and diversity offered, and the robust return on investment from that credit is a tremendous benefit to our entire economy.”

“The film and television industry knows anecdotally how important the Illinois Film Production Services Tax Credit is to bringing productions here and developing our workforce, but to have the benefits analyzed with real data and real results gives us a benchmark for informed policy decisions,” said Illinois Production Alliance Executive Director Christine Dudley. “To see these results detailed like this is enlightening, and especially valuable as we look at how we can make the state even more attractive.”

“Attracting film and television production to the state – and supporting it – is a win/win for business, labor, and government because it creates new jobs and expands economic opportunity for small businesses,” said Jack Lavin, President and CEO of the Chicagoland Chamber of Commerce. “This study gives us a better understanding of the return on investment for Illinoisans, and it provides a roadmap on how we can remain competitive and increase our market share to grow this tremendous economic engine for Illinois.” 

The Illinois Film Production Tax Credit offers a 30% credit for qualified film, television, streaming, and ad production in the state, with an additional 15% credit available for salaries paid to people who live in economically disadvantaged areas across the state.

The report demonstrates the credit’s success, with some 93.5% of productions filmed here reporting that they would not have come to Illinois were it not for this benefit. The taxpayers have also benefited tremendously from this investment in production, with a return on investment of 6.81 – that is, for every dollar the state spent on the tax credit, nearly $7 was generated. Furthermore, the money spent by productions across the state did not only benefit industry-specific businesses – for an average mid-budget production some 62.6% of spend flowed to sectors including location fees and real estate, travel and transport, construction, health and medical, and other local labor such as hospitality and catering. Altogether, this resulted in $3.6 billion in economic activity between FY17 – FY22, with more than 5,100 full-time equivalent jobs created in 2022 alone. 

Illinois’s Film Production Services Tax Credit also attracts independent productions by enshrining a lower minimum spend into the law, requiring that a production running longer than 30 minutes spend a minimum of $100,000 and those below 30 minutes spend $50,000, making the state more competitive against other potential filming locations with higher minimum spends.

“The Illinois tax credit makes work like WE GROWN NOW possible, removing barriers to entry for independent productions like ours,” said director Minhal Baig, whose coming of age story WE GROWN NOW filmed in and around Cabrini Green and comes to theaters Spring 2024 from Sony Pictures Classics. 

Illinois has also been an industry leader with significant statutory efforts required for the development and hiring of a well-trained and diverse professional workforce across the state. These efforts were further solidified in 2022 with the establishment of the Illinois Production Workforce Development Fund. Workforce grants are funded via a fee on tax credit transfers and aimed at recruiting, training, and hiring a diverse and inclusive film production workforce in the Illinois production industry. Today, an estimated 40% of all hires across productions are diverse. 

“The workforce development grants supported by the Illinois Film Production Services Tax Credit create pathways for well-paying union jobs and provide the resources necessary to teach industry skills. The combination of the state’s tax credits, seasoned workforce talent pool, and our industry infrastructure featuring nearly 1 million square feet of soundstage space, have positioned Illinois as an attractive option for production,” said Anthony Barracca, Business Manager and Treasurer of I.A.T.S.E. Local 476. “This report demonstrates exactly why we say these jobs are so important to the future of the Illinois economy.”

The report also provides comparative data from the most competitive states with incentive programs, providing observations for the possibility of greater benefits to the state and the industry alike, and presenting the Illinois General Assembly with potential for adjustments that could provide for greater market share for years to come. These include the removal of salary expenditure caps, which can draw larger budget film productions; and removal of the sunset provision, which would further reduce risk to producers and stimulate additional investment in Illinois as a production hub.

Read the full report at www.illinoisproduction.org.

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