Airbender Movie Given Pa. Tax Credits for California Work

Officials say it kept the movie's production here.

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M. Night Shyamalan is a hometown boy: He has long favored shooting his movies in and around Philadelphia. The problem for his 2010 flick, The Last Airbender, is that it was an effects-driven film that would be conjured largely inside a computer — and the kinds of computers that do that work are largely in California.

No problem for Shyamalan, nor for his studio Paramount Pictures. The physical movie was shot here, the visual effects were produced in San Francisco — and the movie claimed a Pennsylvania credit for the work done in California.

The L.A. Times reports:

Citing “special circumstances,” the Pennsylvania Department of Community and Economic Development granted Paramount a waiver that allowed the studio to claim a 25% tax credit on $29 million in visual effects work performed outside the state, according to a Nov. 12, 2008, letter to Paramount obtained by the Los Angeles Times in a public records request.

The waiver saved the studio about $7 million. Or, put another way, it cost Pennsylvania that much in lost tax revenue.

Jane Saul, former director of the Pennsylvania Film Office, said the waiver was justified because Pennsylvania didn’t have a visual effects house capable of achieving what the filmmaker wanted. She said the project was too valuable to pass up.

“This is M. Night Shyamalan,” Saul said in an interview. “The jobs that were created and associated with this project and what it did for the state and the industry — that’s how such a decision was made. It was such a benefit and it was within the confines of the law.”

The waiver was granted while Ed Rendell was governor. A current spokesman for the department said a similar waiver would not be granted today under Gov. Tom Corbett.