The Nevada Assembly just voted to approve what could become the state’s largest public subsidy ever. By a narrow 22-20 margin, lawmakers passed a bill giving $1.4 billion in tax credits over 15 years to support a Hollywood movie studio project in Las Vegas.
Assembly Bill 238 would dramatically expand Nevada’s film tax credit program. Right now, the state caps these credits at $10 million per year. This bill would raise that to $120 million annually for 15 years, starting in 2028.
The money would mainly support a 31-acre film studio called the Summerlin Production Studios Project. Big names like Sony Pictures Entertainment and Warner Bros. Discovery are attached to the project, with Howard Hughes Holdings doing the development.
Here’s how these transferable tax credits work in practice. Let’s say the state gives Sony $50 million in tax credits. Sony can sell those credits to another company, like MGM Resorts, for about $45 million. MGM then uses those credits to pay their state taxes instead of cash. Sony gets $45 million, MGM saves $5 million on their tax bill, and the state receives the tax credits instead of cash revenue.
The Vote Breakdown
The vote didn’t split cleanly along party lines. Among the 27 Democrats in the Assembly, 15 voted yes and 12 voted no. Among Republicans, 7 supported the bill while 8 opposed it.
This actually got less support than a similar big subsidy bill from two years ago. The Oakland A’s baseball stadium bill passed 25-15, while this movie studio bill only managed 22-20.
What Supporters Say
Democratic sponsors Sandra Jauregui and Danielle Monroe Moreno say this isn’t corporate welfare but an investment in a new industry. They argue it will bring thousands of jobs and new revenue to Nevada.
The bill includes some safeguards that weren’t in the original version. An amendment creates a special tax zone around the studio that directs some local tax money to fund pre-K programs in East Las Vegas.
What Critics Point Out
Opponents question whether taxpayers will get their money’s worth. An independent analysis commissioned by the Governor’s Office of Economic Development found that while the bill would stimulate the economy, the benefits wouldn’t offset the massive cost of the tax credit program.
Even a more favorable analysis paid for by the bill’s supporters acknowledged that most of the projected economic activity would be indirect effects, not direct job creation.
The Bigger Picture
If this becomes law, it would surpass the $1.25 billion in incentives Nevada gave Tesla in 2014. The total package equals $1.8 billion in public subsidies for the TV and film industry when you include credits for other productions.
While tax credits aren’t paid until companies prove they’ve met requirements, the state must count them as “negative revenue” when planning budgets. This means they do affect how much money the state has available for other priorities.
What’s Next
The bill now heads to the Nevada Senate for consideration. The legislative session ends Monday, so senators have just days to decide. If it passes there, it goes to Republican Governor Joe Lombardo’s desk.
Nevada isn’t alone in debating these kinds of entertainment industry incentives. States across the country offer various film tax credits, though few approach this scale. The debate often centers on whether these programs create lasting economic benefits or just shift entertainment production from one state to another.
The outcome in Nevada could influence how other states approach similar proposals, especially given the size and scope of this particular package.
This article was written with the assistance of AI. Please verify information and consult additional sources as needed.
