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Georgia passes law offering $25 million in video game tax breaks
Georgia passes law offering $25 million in video game tax breaks
April 14, 2014 | By Alex Wawro




Georgia state governor Nathan Deal signed a bill into law this morning that will provide $25 million in tax credits for video game developers in the region, according to a report published to the website of the Atlanta Journal-Constitution.

It's part of a legislation package known as House Bill 958, which includes similar tax relief efforts for food banks and energy-efficient item vendors in Georgia.

Hi-Rez Studios (Smite), Tripwire Interactive (Rising Storm) and CCP Games (EVE Online) are among the developers who maintain offices in the state of Georgia, which has a history of attempting to lure digital entertainment companies to the region with generous tax incentives.

Regrettably, CCP Games announced today that it plans to lay off 56 employees in the Atlanta office and shut down production on the World of Darkness MMO game, which was in development for roughly eight years. Those who remain in CCP's Atlanta, Georgia office will work to support the company's long-running MMO game Eve Online.


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Comments


George Menhal III
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This will probably be a great thing. Bobby Jindal did the same thing when he became governor of Louisiana, and since that time there have been several high-profile development studios which have set up shop in the greater New Orleans area. I'm still busy trying to beat the doors down to get in, but I'm very happy to know that a neighbor state may soon have a thriving development community of its own.

Greg Scheel
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This is crap, how on earth can these moron politicians provide for schools, roads, and law enforcement that does not shoot innocent people if they keep cutting taxes?

As a business, I am aware that I need to pay for things if I want them to be there when I need them.

I want politicians to fight for the people, and kick the crap out of every special interest to come down the turnpike, not kowtow to every monied interest in the world, nor to go begging for votes.

Want me to move my nascent business to your state? Tax the crap out of every millionaire, prosecute all the polluters, banksters, and bribe payers, fund liberal arts in the schools including music and sports, provide free healthcare, housing and food to all the people, and take no shit from anyone.

E Zachary Knight
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Greg,

"Tax the crap out of every millionaire,"

You do realize that millionaires can just up and leave the state if they don't like the taxes right? How will the state fund the rest of your laundry list of ideal conditions if all the millionaires move to Alabama and run their companies from there?

Erekose Craft
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As a GA resident, the way I viewed this tax break was as an attempt to bring more jobs to the area. More jobs means more money flow. More money flow means more taxable income, more money spent on taxed goods, more people moving into the state for jobs. Taxes don't solve everything in my opinion.

E Zachary Knight
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I once got my State Senator to introduce a bill to grant tax breaks to game developers in Oklahoma. It felt good to get that far. Unfortunately, the bill was dead from the start as it was written to exclude M and AO rated games. This had the unfortunate effect of barring the tax break from being used for some of the most profitable single title games made as well as prevent it from being used for games that don't require an ESRB rating such as mobile.

Fortunately, the bill went no where and I later learned my lesson that special tax breaks will never result in a healthy business climate. It would be far better to have low overall taxes and a legal and bureaucratic that is friendly to businesses of all stripes. Providing tax breaks for specific industries are a means to one of two ends. 1) Controlling the business you provide the tax breaks too, or 2) promoting a certain business at the expense of other businesses that might compete with it.

So, I no longer advocate for such tax breaks.

Ozzie Smith
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I'm from Atlanta but I don't really know if the tax break works. Generally it seems that instead of creating more business, special tax breaks just encourage companies to move from state to state (giving 0 net growth to the industry as a whole) or allow new businesses to exist that will go under as soon as the tax break ends.

Georgia has had the tax break for years (this is just renewing it I believe) but I'm not sure how big of an impact it has had. Maybe Hi-Rez would have had to shutdown after failing to make a profit from Tribes, but the tax break gave them enough room to take one more shot with Smite? I'm not really sure.

Greg Scheel
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Business runs on customers, not tax breaks. No customers, no profit, who cares about taxes?

If all I had were food, clothing, shelter, healthcare, and education, that, plus my own efforts, would form the basic investment my business needs to attract customers.

I would move to any state that provides what I need to get started on a successful business. As it is, I plan on moving to Oakland CA, as I know for sure the general populace does in fact support the kind of environment I need, even if the 'elected' government at this time does not.
( I am currently in Concord Ca, so Oakland is not far. )

Alan Wilson
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The tax credit has multiple benefits all round. For us (Tripwire), as Georgia tax payers, it reduces our tax burden in the state. Any excess in the tax credits we can sell. That both reduces our costs some and gives us extra capital so that we can grow faster. Net result - faster growth, more jobs in our industry - and spin-off benefits in related industries/service sector.

Also, we only earn the tax credit on money spent in the state of Georgia. This is a huge incentive to spend money in Georgia, instead of out of state. Any work we can subcontract in the state, we do. Faster growth for related companies in the state, more jobs in the state.

Finally, silly as it may sound, that incentive also has us choosing Georgia-based companies (wherever possible) for everything else we do. We fly Delta because they are Georgia-based. We use UPS because they are Georgia-based.

The tax credits don't make the difference between staying afloat or going under (see CCP in Atlanta) - but they enable well-managed companies to grow that bit faster.

To the comment that "Business runs on customers, not tax breaks": a business earns revenue from customers - correct. But a business has to be profitable to remain a business. This means balancing the costs against the revenue. A tax incentive that reduces our cost IS a benefit so, yes, we care a LOT about it. If you "don't care about taxes", you don't understand cashflow - and any business you set up is likely to end up (like 80% or more of SMEs) going under because of lack of understanding of cash, sad as that stat is. To be more pejorative about that comment - grow up.

In summary: tax credits aren't a make-or-break for the business, but they are a great enabler for us - and a great incentive for Georgia-based businesses.

Ozzie Smith
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Thanks for the response Alan, it's good to hear first-hand how the tax credit affects game devs in GA. I'm not not really sold on the long-term benefits of business tax credits to the national economy, but that's another discussion altogether.

Greg Scheel
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@Wilson

I find it of particular interest that you would feel compelled to engage in a pejorative comment, even thou I myself have done no such thing. Even more ironic, that you should feel compelled to engage in the childish act of telling someone you don't know to grow up. Please, try to keep your discussion respectful. I make quite a few harsh comments myself, but I direct my comments at ideas, not people.

As for cashflow, please, think hard on this, if the state were to do it's job, and provide for food, clothing, shelter, healthcare, and education for all... that would provide for everything a startup needs to stay in business indefinitely.

Sean Kiley
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If I had free food, clothing, shelter, healthcare and education, why would I get a job?

AJ S
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@Greg
I wanted to address a few points you made. Regarding how politicians can pay for schools, roads, and law enforcement while cutting taxes is quite simple. Liberals can never seem to understand that when you cut taxes people keep more of their money and like the saying goes the more you make the more you spend. Cutting taxes is about putting more money in Americans pockets so they have the ability to spend more which creates jobs and grows the tax base leading to an increase in revenue.

As for taxing the crap out of every millionaire, like others have said they will just go elsewhere. The reality is nobody wants to pay more in taxes. Besides these millionaires already pay more than the majority of the taxes. The idea that if we just tax all of the millionaires it will fix our financial problems is simply incorrect. We have a spending problem in this country and until that is fixed it doesn't matter how much revenue is brought in because again the more you make the more you spend also applies to the government.

As for funding liberal arts in schools I don't really see the point. The number of professional musicians and athletes is small in number and the majority of people never make the big leagues. This money could be better spent on more practical courses that would benefit more people when they enter the real world.

Finally in regard to free healthcare, housing, and food for all this is but a fantasy. Realistically there isn't enough money for all of this. Forgetting about money for a moment there are other downsides to this. First and foremost our country guarantees the right to life, liberty, and the pursuit of happiness. There is no right to free healthcare, housing, and food. I don't believe in entitlement programs and in my opinion local communities, charities, and religious organizations should be helping those in need rather than the federal government. The entitlement programs in our country create a culture dependence on the federal government much like a drug addiction. Why would an able bodied man who is on welfare get an honest job that pays less than what they get from the government?! The sad part about all of this is the people who really need help are being exploited by politicians in the sense of getting them hooked on government dependence in return for votes.

Overall I think you're off base and the Georgia tax credit for game devs is a good thing. It helps smaller studios and indie devs get up and running faster by allowing them to keep more of their money while at the same time encouraging businesses to establish themselves in Georgia which creates jobs and in-turn will bring in more revenue.

adam anthony
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"As for funding liberal arts in schools I don't really see the point. The number of professional musicians and athletes is small in number and the majority of people never make the big leagues. This money could be better spent on more practical courses that would benefit more people when they enter the real world."

Yep, you are right; you really DONT see the point. I wont explain why liberal arts are important, but it goes beyond financial gain. Believe it or not, somethings dont revolve around cash.

AJ S
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Don't get me wrong I think we should have music and sports programs among others in schools I was simply addressing his point of specifically calling out liberal arts programs when I can make the arguement that the money could possibly be better spent elsewhere on courses such as math, sciences, and technology.


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