North Carolina introduces games tax breaks

If Chancellor George Osborne thinks he's still short on reasons to reconsider axing games tax relief in the UK, he only needs to look at the government of the US state of North Carolina, which has just agreed to award economic incentives to its huge games business.

Home to 14 games publishers and developers, including Epic and Red Storm, North Carolina now joins Canada and a host of other games development hotbeds that are now getting tax relief and increasingly threatening the UK's games business.

The state's new incentives become effective on 1 January 2011, and include a 15 per cent tax credit on wages for employees in the industry.

North Carolina's government hopes the tax relief system will not only boost the state's economy, but also encourage games developers from other locations, such as the UK, to relocate to North Carolina.

Wayne Watkins, project manager of Wake County Economic Development (the county where Epic is based), explained that "we now have targeted economic development tools that can help both existing companies, as well as companies looking to relocate operations."

"Game developers and publishers are keen to operate in regions that support and sustain the growth of their operations, especially as the current economic climate places a premium on cost-effectiveness," explained Watkins.

After scrapping the previous Labour government's plans for games tax relief in the budget, Chancellor George Osborne has recently hinted that he'll review the situation in the Autumn.

Speaking to THINQ last month, TIGA (the UK games industry's trade association) CEO Richard Wilson said he was confident the plans would be reintroduced eventually. I'm "ultimately convinced that we will win this argument," said Wilson, adding "it will just take longer than we originally hoped."