Massachusetts: Department of Revenue Report Puts Spotlight on Film Tax Credit

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As the New York Times reported earlier this month, California's tax incentive for film production - a loss of $100 million in exceptionally revenue scarce tax revenue - seems likely to escape the budget cutting axe, despite the state's mammoth deficit. Meanwhile, Utah's Film Commission Director Marshall Moore recently leapt to the defense of his state's tax giveaway for movies and television.

Lawmakers in both states should think again. A new and detailed evaluation of Massachusetts' film tax credit should lead policymakers across the country to ask whether they are getting their money's worth from such incentives. Between 2006 and 2008, the Commonwealth paid out a total of $166 million in film tax credits. According to the report, the new revenue resulting from film production activity was just $26 million.

The report further notes that "feature films, television series, commercials, and documentaries produced in the Commonwealth" between 2006 and 2008 generated roughly 3,200 full time equivalent jobs. But approximately 60 percent of those jobs were held by non-residents, while over 80 percent of the wages paid on film productions accrued to employees living out of state. (The full report is available here.)

Connecticut Voices for Children highlights many of the same problems in its recent and valuable analysis of that state's film tax credit.

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