Investigation Over Georgia Film Tax Credit Launched

ATLANTA, GA — State officials are investigating a possible case of tax fraud after a whistleblower accused Warner Bros. of claiming a tax credit of more than $600,000 for a piece of equipment that was never used in Georgia.

Variety reports that the alleged abuse happened during the filming of the Clint Eastwood-helmed "Sully," starring Tom Hanks. According to the report, the company submitted the expenses in Georgia, which offers a 30-percent tax credit for film production costs incurred in the state.

But contracts and emails obtained by Variety show that the items billed in Georgia matched expenses that actually were paid in California. "Sully," is the story of hero pilot Chesley Sullenberger, who successfully landed U.S. Airways Flight 1549 on the Hudson River in 2009, saving all 155 passengers and crew members aboard.

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The equipment in question was an Airbus A320 fuselage that ended up never being used in the movie, Variety reported. Variety learned of the alleged fraud from a whistleblower who also contacted the Georgia attorney general's office. The office confirmed to the entertainment-industry magazine that an investigation is under way by the state's Department of Revenue.

A Warner Bros. spokesperson denied wrongdoing in a statement to Variety.

"We carefully followed the rules and regulations as set forth by the state of Georgia," the statement said. "After production, we submitted our qualifying expenditures, and they were fully audited and approved without question by the Georgia Department of Revenue."

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Dee Dee Myers, the head of communications for Warner Bros., told Variety the company would never risk its relationship with Georgia, where the movie and television industry has boomed thanks, in part, to the Peach State's generous tax-incentive policy.

"We want to protect our tax credits," she said, according to the magazine. "We don’t want to abuse the system. That’s a one-way ticket to ending the program for us and for the industry."

But Variety reports that "(i)nterviews and records show that the 'Sully' producers engaged in a concerted effort to bill California expenses through a Georgia conduit, making it appear that they qualified for the credit. The funds were remitted to a California vendor, which supplied equipment for use in California."

To read the original report in Variety, click here.

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