Judging by the deluge of sequels, remakes and reboots being released nowadays, Hollywood studios are always on the lookout for old ideas they can turn into a quick cash grab.

In Nevada, the idea they’ve found isn’t a movie — it’s another round of lobbying for taxpayer money. 

In the closing days of the 2025 legislative session, a $1.4 billion incentive package to lure filmmakers to the Mojave nearly made it to Gov. Joe Lombardo’s desk. After having narrowly passed the Assembly, AB238 was set to be considered by the Senate before the chaos of the session’s final days derailed the proposal. 

Howard Hughes Corp., Warner Bros./Discovery and Sony Pictures, however, didn’t seem likely to let a little thing like sine die discourage their efforts to radically expand the state’s film tax credit program. And now, legislative leadership and Gov. Lombardo have confirmed they are open to bringing the issue back to life in a possible special session this fall. 

Gov. Lombardo told Channel 13’s Steve Sebelius that he considers the measure a “jobs” bill that could help diversify and strengthen Southern Nevada’s regional economy — therefore giving it a bit more urgency than other issues that failed to advance to his desk during the regular session. 

"The overarching piece is creating an environment for those [industry] jobs to be brought here and to be had," Lombardo said. "So that's what we're discussing as part of the film tax credit."

The governor is certainly right to be worried about the resilience of our local economy as tourism dips and consumer prices continue to climb. However, handing out scarce public funds to subsidize a multibillion-dollar industry and hoping it trickles into the broader economy isn’t a great idea under the best of economic conditions — let alone the uncertain ones we may soon be facing. 

Surely, there are better ways of creating jobs and diversifying our economy than giving our tax dollars to corporations in Hollywood. 

As a “jobs” program, such tax credit schemes aren’t exactly harbingers of economic utopia. Indeed, they’re often quite the opposite. Stories of troubled film-industry partnerships from other states demonstrate just how wasteful, unscrupulous and ultimately fruitless such programs can be, with tax credit schemes either negatively affecting overall job creation or having no discernible impact whatsoever. 

As it turns out, there’s a reason serious economists consistently warn against such unwise policies, and that’s because they don’t work. Even analysts commissioned by the Governor’s Office of Economic Development have warned that both proposals presented during the last legislative session would likely result in “a negative return on investment for every dollar invested by the state.” 

One major reason such film incentives don’t ultimately create regional prosperity is because the credits aren’t merely an abatement or some preferential discount on taxes. Instead, they’re effectively coupons that allow companies to sell the credits to other taxpayers — meaning even if a company doesn’t actually have a tax liability, it can sell its credits to someone who does. 

The result is that such programs can result in lower tax revenues from companies that don’t even have anything to do with the industry lawmakers were trying to “incentivize” in the first place.

And, for individual filmmaking projects, reducing tax liability isn’t all that hard considering the fuzzy accounting methods Hollywood studios use to minimize or even erase profits on otherwise successful projects. As I’ve written before, even some of the highest-grossing movies of all time — including Harry Potter and The Order of the Phoenix, Forrest Gump, Men in Black and Star Wars Episode VI: Return of the Jedi — have never “officially” produced a profit. 

That lack of official profit not only protects studios from having to pay royalties to certain actors or make good on various profit-sharing agreements, but it also affects a project’s potential tax liability — leaving certain production companies with tax credits well in excess of what they actually owe locally. 

And what do production companies do with all those tax credits when their (ostensibly) unprofitable project doesn’t owe much to local governments? Well, they sell them at a discount to local businesses and make a profit off credits they would otherwise be unable to use. 

Indeed,  97 percent of Georgia’s film tax credits were reportedly sold by production companies to other (tax-owing) businesses — businesses that often weren’t even connected to the entertainment industry for which the credits were intended. 

Here in Nevada, we’ve already seen how similar transferable credits can catch government accountants off guard. When Tesla received its first batch of transferable credits in 2016 as part of its Gigafactory development, it didn’t actually have any meaningful tax liability toward which it could apply the credits. So, the company instead sold those credits to MGM — leaving state coffers collecting roughly $20 million less than they otherwise would have from a company completely unrelated to Elon Musk’s project in Northern Nevada. 

No wonder studios and their partners are so determined to expand such programs for their own use in virtually every state. After all, selling tax credits you’re not going to use is almost as good as being handed envelopes full of cash from the local treasury. 

Unfortunately, states all across the nation are foolishly lining up to give the industry ever-larger shares of public funds through such programs. California just recently doubled its number of tax credits, Texas increased its program to $150 million per year in June, Georgia has unlimited tax credits available for production companies, and even Alaska considered getting in on the bidding war this last year. 

Of course, no amount of credits have been enough to lure studios out of California and create the next Hollywood somewhere else, the grand economic promises of industry lobbyists, studio executives and popular movie stars notwithstanding. Instead, states have wasted billions in public dollars for little more than the supposed prestige of having their state or city listed in the ending credits of popular productions — all while padding the profits of a multibillion-dollar filmmaking industry.  

No wonder Hollywood thinks it’s an idea worth bringing back time and again. 

Michael Schaus is a communications and branding expert based in Las Vegas, Nevada, and founder of Schaus Creative LLC — an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He has more than a decade of experience in public affairs commentary, having worked as a news director, columnist, political humorist, and most recently as the director of communications for a public policy think tank. Follow him on Twitter @schausmichael or on Substack @creativediscourse.

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