Nevada’s Film Tax Credit Bill Dies in Senate

Nevada’s Assembly Bill 238 has died in the Senate, putting an end to an initiative that would have provided almost $2 billion in public subsidies to build a new movie studio. Despite making strides in the Assembly, the bill failed to pass the Senate and become law.

Proponents Promised Economic Growth

AB 238 sought to provide $1.4 billion in transferable tax credit to Sony Pictures Entertainment and Warner Bros. Discovery, allowing the two media giants to build a new studio in the Silver State. AB 238 would have furthermore increased the film tax breaks of $10 million per year to a staggering $120 per year for 15 years, starting in 2028.

In total, the two studios would have received $1.8 billion in public subsidies.

The so-called Summerlin Production Studios would have served as a major economic contributor, diversifying Nevada’s revenue streams.

The Summerlin Production Studios would have occupied a 31-acre space in its namesake neighborhood and, if approved, would have received the largest public subsidy in the state’s history, beating the $1.25 billion for Tesla Motors in 2014.

The Measure Passed the Assembly

Last week, AB 238 narrowly passed the Assembly with 22 votes in favor of the measure versus 20 votes against.

Opponents of the measure were concerned about the return on investment, claiming that it would have been too low. While critics mostly agreed that the bill would generate additional economic activity, they were uncertain whether that would have been enough to offset the expenses.

A report the Governor’s Office of Economic Development ordered found the state would get back $0,52 in taxes for each dollar it spent on tax credits.

A separate study by proponents of the measure painted a brighter picture but admitted a lot of the expected gains would come in roundabout ways.

AB 238 Died in the Senate

On Monday, however, the bill reached the Nevada Senate where it was quickly snuffed out.

Despite last-minute efforts to merge AB 238 with a similar Senate bill (SB 220), the measure ended up falling through, ending the dream of a huge movie studio in Nevada, at least for now. Considering Nevada’s biennial regular sessions, proponents of AB 238 would have to wait until 2027 to potentially submit a similar measure.

For context, the aforementioned SB 220 sought to build a separate film studio at UNLV’s Harry Reid Technology and Research Park. Unlike AB 238, however, SB 220 did not propose a tie-up with a major movie studio.