The Equity Factor

It’s ‘House of Cards’ vs House of Delegates in Maryland Film Tax Standoff

Hit Netflix drama House of Cards has threatened to leave Maryland if it isn’t assured lucrative tax credits.

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The state of Maryland has been very kind to the Netflix drama House of Cards, lavishing the Kevin Spacey vehicle with millions in tax credits for filming its first two seasons there. Now, the production company behind the show wants to make sure filming the third season in Maryland will be worth its time — it wants more tax credits. And, as is standard operating procedure in these stand-offs, it has threatened to film elsewhere if the subsidies don’t happen.

But Maryland Delegate William Frick has another idea. After Media Rights Capital, the California company that produces House of Cards, wrote Gov. Martin O’Malley saying it would skip town if lucrative tax credits weren’t secured, Frick got to work. On Thursday, the House of Delegates adopted budget language that allows the state to seize a production company’s property if it decides to stop filming in Maryland.

Now, the state can’t seize property for every production crew that gets film tax incentives and then packs up. As the Baltimore Sun explains, the state now essentially has eminent domain over any company that has claimed $10 million or more in tax credits. House of Cards, according to the Sun, has eaten up the majority of Maryland’s film tax credits.

The series racked up $11.6 in tax credits for its first season and could reach up to $15 million for its second — the numbers aren’t finalized yet — according to the Washington Post. In its letter to O’Malley, Media Rights Capital said it would have similar output production to Season Two and would qualify for roughly $15 million in credits. The state said it could only guarantee $4 million.

Which is why star Kevin Spacey met with the state’s General Assembly last Friday in an attempt to convince lawmakers to amp up the tax incentive program. (Hollywood, too, is pushing for more film tax incentives in California.) It’s also why the House, responding to Media Rights Capital’s steep ask, accepted the updated budget language without debate. Now the language has to pass in the Senate, which has already voted to raise the film tax credit cap.

Internet commenters and tax incentive truthers are up in arms, comparing this to when the Baltimore Colts left for Indianapolis in 1983 because the owners didn’t get a shiny new stadium. But I think Frick is onto something. The idea of incentivizing business is that companies will not only come to your state, spend money and hire locals, but that they will continue to do so. The House of Delegates simply wants to ensure that production companies don’t roll into town for two years before heading to whichever state offers a more lucrative deal for Season Three.

The Equity Factor is made possible with the support of the Surdna Foundation.

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Bill Bradley is a writer and reporter living in Brooklyn. His work has appeared in Deadspin, GQ, and Vanity Fair, among others.

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Tags: economic developmentequity factor

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