April 1, 2013

Briefing: Mass. Film Tax Credit

A new report from the Massachusetts Department of Revenue (DOR) said the state's film tax credit program, which helps lure film and television productions to the Bay State, cost taxpayers $44 million in 2011. But it has yielded economic benefits, such as the creation of nearly 500 full-time equivalent jobs and a net economic boost of close to $39 million. Gov. Deval Patrick wants to cap the credit at $40 million per year, and that could impact the potential success of two studios planned for Central Massachusetts: one in Devens that's scheduled to open this year, the other in Westborough that's in the pre-planning phase.

What did the tax credit help accomplish in 2011?

There were 77 projects shot during the year that benefited from the credit, but the DOR said "a number" of major motion pictures were shot in Massachusetts, which more than offset a decline from the 112 projects that were shot in 2010, but which cost the state a substantially lower $18.1 million.

Why does the governor want to cap the credit?

The reason 35 more movies in 2010 cost less than half as much is that the films that year had lower budgets. According to State House News Service, Patrick wants the cap, in part, over concerns that the money was being used to fund the excessive salaries of movie stars. Previous efforts to limit the tax credit program have met with resistance from lawmakers, who say it has helped lure high-profile film and TV productions.

Does the cap make sense?

Christopher Byers, head of operations for New England Studios, which plans to open in Devens this summer, has called Patrick's proposed cap "way, way too low." The governor's proposal comes at a time when the future of film production appears to be on a growth track in Massachusetts. The DOR said total production spending in 2011 that was eligible for the tax credit was $176 million, more than double what was spent in 2010 ($71.6 million).

What’s the industry’s potential in this area?

In addition to the Devens site, a Hopkinton resident, Anton Nel, has approached Westborough officials about buying and transforming the Westborough State Hospital into a combination film studio and high-end hotel, with shops and other amenities. In an interview with the WBJ, Nel said he hopes to find a mix of digital media companies who could be tenants at the development. He said what he has found in Massachusetts amounts to "a gold mine," and that some technology firms don't realize what applications their technology could have for filmmakers.

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