LAS VEGAS (KLAS) — Nevada is making a pitch to Sony Pictures, putting together a package of tax breaks to tempt the movie-making giant to set up shop in Las Vegas.
Tax breaks worth roughly $200 million per year are part of the economic incentives under consideration. That’s how the deal came into the public eye, as Nevada lawmakers consider changing existing law to get around a limit on tax breaks for movie studios that is currently in place.
Senate Bill 496, sponsored by Sen. Roberta Lange (D-Las Vegas), was introduced on Thursday in Carson City to establish the Film Tax Credit and Infrastructure Program. The bill was referred to the Committee on Revenue and Economic Development.
The $190 million annually in tax credits for 20 years would be the largest proposed tax incentive package in recent state history, even after its deals with Tesla and Redwood Materials totaled hundreds of millions of dollars each. But unlike those deals, which used direct tax abatements, these tax credits would only be awarded upon completion of the films at studios built by private developers.
A statement from Sony Pictures indicates the company is prepared to commit up to $1 billion in production spending in Southern Nevada over a decade if SB496 is approved.
Two sites are established as zones where the development could occur — one at the UNLV Tech Park, located in the southwest valley on Sunset Road near Durango Drive, near IKEA. The second site is in the Summerlin area at an undisclosed location.
The legislation would involve the state entering an agreement with private developers who would pay for the two film production sites.
“It creates a whole new industry in Nevada,” Lange said in an interview Thursday. “I think it helps build and diversify our economy, which is something we’ve talked about in Nevada for as long as I’ve lived here.”
With its Columbia Pictures division, Sony is one of the biggest movie production companies in the world, part of the “Big Five” that include Universal, Paramount Pictures, Warner Bros., Disney, and Columbia. The Spider-Man movies of the Marvel Universe, “Ghostbusters,” “The Terminator” and “Close Encounters of the Third Kind” are among the company’s most popular productions.
Sony Pictures is currently based in Culver City, California.
“The film industry would create thousands of good-paying, union jobs in the process of bringing the Silver State to the silver screen. After two years of work on this bill, I am excited to introduce it,” Lange said.
Under the bill, production companies would apply for the transferable tax credits, which are used to offset the modified business tax, insurance premium tax or gaming license fee. The tax credits could be 30% of production and construction cost for films — up from the current 15% threshold. Part of those tax credits would fund local workforce training and educational programs for jobs that the studios create.
The developers of the UNLV and Summerlin sites would foot the bill for development of the production studios, projected at $500 million and $400 million respectively by 2030.
“The risk is really on the developers, not on the state of Nevada,” said Republican Senate Minority Leader Heidi Seevers Gansert, of Reno, who co-sponsored the bill.
Brandon Birtcher, co-owner of Birtcher Development, which is developing the UNLV site, said it’s still being determined which film or content creator would use his site. Sony is planned for the Summerlin site, run by the Howard Hughes Corporation.
Tax incentives for some of the nation’s largest companies have become a major driver of recent efforts to diversify Nevada’s economy. The Las Vegas area was hit particularly hard during the pandemic and is particularly reliant on gaming and tourism.
In northern Nevada, major tax incentives have focused on the U.S. transition to green energy. The governor’s economic development office awarded Tesla $330 million in tax abatements in March for a multi-billion dollar expansion near Reno, as well as $105 million in tax incentives to Redwood Materials in December, a massive lithium battery recycling plant in northern Nevada.
Other incentives might not be revealed immediately. The Governor’s Office of Economic Development (GOED) is the agency that crafts the blockbuster deals. The details of a recent deal involving Tesla weren’t revealed until just days before the Nevada Legislature was informed.
The Associated Press contributed to this report.