Colorado, by nearly all accounts, should have a booming film industry. We have stunning scenery, solid production infrastructure, and a strong cinematic history: Nearly 400 movies have been shot here—at least partially—over the past century, including films such as Butch Cassidy and the Sundance Kid, Indiana Jones and the Last Crusade, and Mr. & Mrs. Smith. Recent big-screeners like Precious and The Cove earned Oscar fame for local production companies, and this month’s Starz Denver Film Festival hosts a record eight Colorado feature filmmakers. “We have everything we need to be successful,” says Colorado film commissioner Kevin Shand, “with the exception of a large incentive.”

Ah, an incentive. In 2006, the state approved a 10 percent filmmaker rebate on production costs. Unfortunately, that same film gets a 25 percent credit in New Mexico, or up to 42 percent in Michigan. With that discrepancy, it’s no surprise that in-state production has been dwindling. Over the past three years, the biggest movie shot in Colorado was Eddie Murphy’s Imagine That—which was a box-office disaster.

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Recognizing the financial boon that movie production can bring via lodging, dining, and other expenditures for cast and crew, the state is inching toward becoming more film-friendly. The legislature recently revised the eligibility requirements for the incentive program, which makes it easier for filmmakers to qualify for the rebate—and, hopefully, will lend Colorado some production appeal. “Ultimately, our role is to encourage people to come to Colorado and spend their money,” Shand says. “We really do see this as a definite form of economic development.”