Film Subsidies Weren't Enough To Keep Marvel in Georgia

Studios certainly appreciate free money, but lower fixed costs on labor are a much better incentive than tax credits they don't use.

While "Hollywood" is still synonymous with the American film industry, few films and TV shows actually film in Los Angeles. Marvel Studios, one of the most prolific production companies in recent years, is shifting many of its projects out of the country, even after states lavished it with free money from taxpayers.

"Marvel is one of many Hollywood companies that have shot in Georgia to take advantage of the state's generous production tax credits," Ben Fritz reported this week at The Wall Street Journal. "It made nearly two dozen superhero movies and TV shows in the Atlanta area. But beginning with this summer's 'The Fantastic Four: First Steps,' Marvel is making most of its upcoming content in the United Kingdom."

Marvel isn't the only one: While DC Studios' recent blockbuster Superman filmed at Trilith Studios just outside metro Atlanta, its next two films—Supergirl and Clayface—will each instead film in the U.K.

This shift was in the works for awhile: Starting with 2014's Ant-Man, "Marvel over the next decade pumped out movie after movie in Georgia, receiving around $1 billion in tax credits in return," The Atlanta Journal-Constitution reported earlier this year. But the May 2025 film Thunderbolts "may end up being the last Marvel film to use Georgia as its home until the winds shift again."

"Rising costs in Georgia mean it's now cheaper to shoot in the U.K.," Fritz writes. As a result, the biggest projects currently on Marvel's roster—like big-budget sequels Spider-Man: Brand New Day and Avengers: Doomsday—are filming in England, while the preceding films were made in Georgia.

This pivot is happening even though Georgia is home to one of the film industry's most generous tax incentives. A state law passed in 2008 provides "a tax credit equal to 20 percent" of a studio's expenses in the state, upped to 30 percent if the final product "includes a qualified Georgia promotion," like a "Made in Georgia" peach logo in the end credits. The total and per-studio amounts are not capped.

"The program has supported thousands of Georgia jobs and the creation of several thriving studios," the Associated Press reported in 2024. "But it's hugely expensive—the state is projected to give out $1.35 billion in credits this year alone." According to the Georgia Department of Economic Development, total film and TV production spending in the state during fiscal year 2024 totaled $2.6 billion, meaning the state shelled out more than half that amount in tax credits.

The program is actually even more generous than it sounds: The law allows recipients to sell unused credits to other taxpayers. And since studios have little state tax liability, they sell most of the credits for profit.

"Production companies typically sell their film tax credits to other taxpayers because they have little to no Georgia income tax liability," as "income taxes owed are based on sales (or other receipts), not production costs," according to a 2022 report by the Georgia Department of Audits and Accounts. "Approximately 97% of credits generated in tax year 2016 were transferred to another taxpayer (e.g., sold), while less than 1% of credits were used by the production companies against their own income tax liability or their employee income tax withholding."

In other words, studios like Marvel spend hundreds of millions of dollars making a movie, and in return, Georgia taxpayers gift them a lucrative tax credit to sell for cash.

The film industry has long suggested incentives help not only studios, but the states that offer them, boosting a state's overall economy with every film or TV production they support. But state audits have routinely come to the opposite conclusion, finding the tax credits act as a giveaway to billion-dollar companies.

"The impact of the film tax credit on the state's economy has been significantly overstated," found a 2020 audit by the Georgia Department of Audits and Accounts. "The economic activity generated by the film tax credit does not generate sufficient additional revenue to offset the credit, even after considering tourism and studio construction."

A 2023 audit by Georgia State University's Fiscal Research Center found the incentives created just 19 cents for each dollar spent, and that each job created as a result of the program cost the state $160,000.

And yet, even free money wasn't enough to make up for the fact that Marvel could simply make its films cheaper in the U.K. This puts the lie to the theory that these types of incentives are necessary to generate economic development.

"Across the U.S., 29% fewer movies and TV series with budgets above $40 million started filming in 2024 versus 2022, according to data company ProdPro," Fritz wrote. "In the U.K., that number grew by 16%. Its tax credit is similar to Georgia's, but workers there are generally paid less, and studios don't have to cover their health insurance."

In fact, apart from its generous tax incentives, Georgia was an attractive location for film and TV production because its largely nonunionized labor force meant studios could hire crews more cheaply than in heavily unionized California.

Studios aren't alone: Both private sector companies and state governments defend lucrative tax credits, saying companies would go elsewhere without them. But the research says that's not the case.

"Typical incentives probably tip somewhere between 2 percent and 25 percent of incented firms toward making a decision favoring the location providing the incentive," Timothy J. Bartik found in a 2018 report for the W.E. Upjohn Institute for Employment Research. "In other words, for at least 75 percent of incented firms, the firm would have made a similar…location/expansion/retention decision without the incentive."

The same goes for film production incentives. Studios spending hundreds of millions of dollars on potential blockbusters certainly appreciate the free money, but lower fixed costs on labor are a much greater incentive.

"Can we please stop calling Georgia's film tax credits 'tax incentives,'" J.C. Bradbury, economics professor at Georgia's Kennesaw State University, posted on Bluesky. "There is no tax break for film companies, bc they owe very little if any taxes. It works by funneling Georgia taxpayer dollars to film studios. They film here bc we pay them to film here."