When the Nevada Senate voted down AB238 in November 2025, the post-mortems focused almost entirely on the bill's price tag — $1.4 billion in tax credits over 15 years — and the fiscal risk that figure implied. What received far less scrutiny was the structural question underneath it: had the credit been designed as a transferable instrument or a refundable one, and does that choice matter? The answer, according to two decades of state-level outcomes across Georgia, New Mexico, New York, and Louisiana, is that it matters enormously. As Nevada prepares for the next legislative attempt, getting the mechanism right may matter more than getting the headline percentage right.
Two Credit Types, Two Economic Logics
The distinction between transferable and refundable film tax credits sounds like an accounting technicality. In practice, it determines who comes to your state, how quickly they arrive, and how much economic activity they generate on the ground.
A transferable credit — the model used by Georgia — works by issuing a tax credit certificate to the qualifying production company. That company can then sell the certificate on the secondary market to a corporation or individual with Georgia tax liability. The credit buyer pays roughly 85 to 90 cents on the dollar; the production company receives immediate liquidity without waiting for its own tax filing cycle. The state, meanwhile, ultimately loses the revenue when the buyer claims the credit against taxes owed. Georgia's Department of Revenue administers this system with a 20% base credit — rising to 30% when the production includes qualifying promotional material featuring Georgia — and requires a minimum of $500,000 in qualified in-state expenditures to participate.
A refundable credit — the model used by New Mexico — takes a different path. Here, if the credit exceeds the production company's tax liability in the state, the excess is paid out as a direct cash refund. There is no certificate to sell, no secondary market discount, no liquidity gap. The production files its return and receives a check for the net credit balance. New Mexico's Taxation & Revenue Department operates this program with a 25% base credit on qualified expenditures — covering both in-state payroll and nonpayroll spend — and has set a statutory cap of $140 million for fiscal year 2026.
Georgia's Transferable Model: Scale at the Cost of Complexity
Georgia's transferable credit is the most studied film incentive program in the United States, and its results justify the scrutiny. Film and television productions spent $2.6 billion directly in Georgia in fiscal year 2024, part of an $11 billion three-year total from FY2022 through FY2024, according to the Georgia Department of Economic Development. The state certified approximately $1.24 billion in film tax credits in fiscal year 2024 alone — a figure that prompted a legislative effort to cap future certifications relative to a revenue formula, with estimates suggesting a potential cap near $902 million under the proposed mechanism.
The transferable design underpins this scale. Major studio productions with large budgets and minimal Georgia tax liability can still monetize the credit quickly, since the secondary market for Georgia film tax certificates is deep and liquid. National banks, insurance companies, and large corporations purchase these certificates regularly, confident in the legal framework Georgia has built around them. The state's Georgia Code § 48-7-40.26 governs transfer notification requirements, certificate balances, and audit procedures — a robust legal infrastructure that took years to develop but now operates with minimal friction.
The tradeoff is fiscal opacity. Because credits are sold on a secondary market and may be claimed years after issuance, the state's annual revenue impact can lag the economic activity by multiple fiscal cycles. Critics of Georgia's program — including academic economists who have questioned official multiplier estimates — argue this makes fiscal cost-benefit analysis genuinely difficult to perform in real time.
New Mexico's Refundable Model: Clarity and a Hard Cap
New Mexico took the opposite design philosophy and built an equally successful industry around it. The state's 25% refundable credit provides immediate, predictable liquidity to production companies without requiring them to navigate a certificate resale market. A production that spends $20 million in qualifying New Mexico expenditures will receive a $5 million refund check. The math is simple. The fiscal exposure is knowable in advance because the program operates under a hard annual cap.
That cap — $140 million for fiscal year 2026 — is New Mexico's primary mechanism for controlling fiscal risk. As of February 2026, the state had paid out approximately $82.8 million under the program, with $57.2 million remaining in the fiscal year cap. The structure creates a predictable pipeline: productions plan around available capacity, the state manages its exposure with clarity, and the secondary-market discount that erodes value in transferable-credit states is eliminated entirely.
The limitation is scale. A $140 million annual cap constrains how many large productions can participate in any given year. Studios planning major, multi-year shoots must verify credit availability before committing — a friction that Georgia's uncapped (though now debated) transferable model avoids entirely. New Mexico's economy has nonetheless absorbed roughly $5.75 billion in cumulative film spending over the past decade, demonstrating that a well-run refundable program can anchor a genuine regional industry even with annual limits in place.
What Nevada Must Decide
Nevada's AB238, which the Assembly approved in a narrow vote before dying in the Senate, proposed a transferable credit structure — $1.4 billion over 15 years, approximately $93 million per year, tied specifically to the Summerlin studio development by Sony Pictures. The transferable design was not incidental. Productions of the scale Sony contemplated would have generated far more credit value than they could offset against Nevada corporate tax liability. Transferability was operationally necessary for the credit to function as intended.
But the Senate's fiscal concerns were not irrational. Nevada has no established secondary market for film tax certificates, no developed audit infrastructure, and no multi-decade track record of program administration to draw on. Building the legal and administrative machinery that Georgia spent two decades developing from scratch — while simultaneously committing to $93 million per year in credit authorizations — represented a genuine risk.
A Nevada refundable credit program, modeled more closely on New Mexico's structure, would offer a different profile: lower per-production value, cleaner fiscal accounting, and a defined annual ceiling that the legislature could adjust biennially as the program matured. Such a program could not immediately support a $500 million studio campus. It could, however, establish the infrastructure, the workforce pipeline, and the production track record that Nevada will need before any larger commitment becomes politically feasible.
What This Means for Nevada
The Georgia-New Mexico comparison offers Nevada a clear policy fork. Transferable credits produce larger economic scale but require sophisticated legal infrastructure and accept fiscal uncertainty as a feature of the design. Refundable credits produce manageable, auditable outcomes but impose per-year constraints on industry growth. Neither model is universally superior — the right answer depends on Nevada's administrative capacity, its appetite for fiscal risk, and the timeline over which legislators want to see results.
What the evidence does not support is the Senate's implicit third option: doing nothing and hoping the industry finds Nevada anyway. Georgia built its $2.6 billion annual economic engine through deliberate credit design over two decades. New Mexico's refundable model turned a small-population state into a top-five production destination through consistent program management and predictable annual caps. Nevada has the infrastructure, the labor pool, and the geographic advantages to compete — but only if the next credit bill resolves the transferable-versus-refundable question before it reaches the floor, not after.
