If enacted, S.B. 1106 will significantly impact the film industry's operational framework in Hawaii, providing financial incentives for productions to hire locally. This legislative change is expected to foster job growth in the film sector and boost the local economy. By ensuring that a certain percentage of hires comes from local workers who file income taxes in the state, the legislation aims to promote sustainable job creation while enhancing the local economy through increased spending from those employed in the industry.
S.B. No. 1106, introduced in the Hawaii legislature, aims to modify the state's income tax credits for the motion picture, digital media, and film production sectors. The bill amends Section 235-17 of the Hawaii Revised Statutes to increase the allowable percentage of tax credits based on the location and hiring practices of qualified productions. Specifically, the bill proposes that productions in counties with populations over 700,000 could receive a tax credit up to 27% while those in smaller counties could receive a credit of up to 34.5%, provided that a minimum percentage of below-the-line positions are filled by local taxpayers.
While supporters highlight the positive economic impacts, opponents may express concerns regarding potential inequity between larger and smaller productions. The bill's requirement for a percentage of local hires could be seen as restrictive by some industry players, who might argue that it could deter external productions from coming to Hawaii due to perceived limitations on hiring flexibility. Discussions may also arise regarding the effectiveness of such credits in truly benefiting local economies versus being an incentive for larger production companies to pocket benefits without significant local investment.