Update on the Film Tax Credit Issue

Over the past two months, I have heard from roughly 200 constituents in my district who are concerned about the Governor’s proposal to eliminate the film tax credit. The people I have heard from are all thoughtful, creative people whose livelihood depends on the credit, or at least has been greatly enhanced by the credit, which does attract film and video activity to Massachusetts. I admire their work and I understand their concerns and I sympathize with their angst.

I have, nonetheless, long supported elimination of this credit because it goes heavily to out-of-state movie stars and producers. It does help lots of people in the state, and those are the people I have heard from, but it is a very inefficient way of helping them. It is also hard to explain why this particular industry should receive such deep assistance when every other industry could also use help. Across the political spectrum, from the Pioneer Institute, to the Taxpayers Foundation, to MassBudget, Massachusetts think tanks who are unaffiliated with the film industry oppose the tax credit. It has endured because the film industry is well represented and well organized on Beacon Hill.

Some of the most thoughtful constituents who have contacted me indicated that they didn’t like the credit going to out of state movie stars and would like to see it used in a less wasteful way to benefit in-state workers. Many of the opportunities for in-state workers depend on attracting the out-of-state movie stars, but some of the people I have heard from run creative video and software businesses who are able to price their products more competitively in national markets as a result of their eligibility for the tax credit — their use of the credit does not depend on actually bringing film shoots to Massachusetts.

To further that conversation, in this year’s Senate budget we adopted a very modest compromise amendment, calling for a report. The amendment was offered by Senators Eldridge and Montigny, both of whom have historically been very active on eliminating inefficient tax credits.

The amendment reads as follows:

SECTION 105A. There shall be a special commission consisting of the members of the joint committee on revenue, which shall make a report regarding legislation modifying the motion picture industry tax incentive program, established in subsection (l) of section 6 of chapter 62 of the General Laws, section 38X of chapter 63 of the General Laws and subsection (ww) of section 6 of chapter 64H of the General Laws, after consideration of the following goals: (i) directing the employment benefits of the credit primarily to residents of the commonwealth rather than out-of-state residents; (ii) focusing on projects that provide long-term employment benefits to residents of the commonwealth; and (c) limiting the total cost of the program while maximizing its benefits. The report shall provide recommendation and any legislation necessary to carry those recommendations into effect. The commission shall consider whether any additional revenue realized should be directed to further expanding the earned income tax credit established in subsection (h) of section 6 of chapter 62 of the General Laws.

If the amendment survives the conference process with the House — which is doubtful, since the House tends to support the credit — it may lead to some future recommendations in this area.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

7 replies on “Update on the Film Tax Credit Issue”

  1. One thought I had is that a certain percentage of suporting roles must be local hires; it works for Canada!

  2. you claim all the money for this text them credit goes out of state to Hollywood people. Yet, you concede that these Hollywood people employed thousands of Massachusetts film industry people. you claim there must be a better way to assist these Massachusetts film industry people. Yet, you do not list any better ways. Until you come up with these so called better ways to help Massachusetts film industry people stay employed, don’t take away the one way they are staying employed now.

  3. First of all I would like to say that the elimination of the film tax incentives [credits] would also mean the elimination of the film industry jobs in Massachusetts as production goes where there are film tax incentives. That means we will either be jobless or forced to move out of Massachusetts to continue our careers in the film industry.

    Please note that even the big name stars have to pay income tax to their work state.

    There are many ancillary businesses in Massachusetts that have developed and grown due to the film tax incentives,

    I implore you to change your position on this issue. Please save my job by saving the Massachusetts Film Tax Credits !

  4. Film tax credit brings commerce to our state that would not be here if it were not for the credit. Dump the credit, lose the commerce. There will be no corresponding increase in taxes paid.

  5. Where each dollar the state spends to bring film and TV production to Massachusetts ends up is less important than how many dollars the tax credit brings into the state that would otherwise not be spent here. This industry deserves the assistance provided by the state because without it the industry will not exist here. With assistance hundreds of millions of dollars will flow from companies located across the U.S. to Massachusets each year and without assistance virtually all of that money will go to other states. Your assertion that Hollywood actors and producers are benefitting from Massachusetts is wrong. Their salaries are based on industry standards and are negotiated by managers and agents. The budgets are set based on how much a production company thinks they can make from the international market for a film. They pick the location based on suitability to the script and budget estimates for a given geographic area. If production companies can’t afford to shoot here and there are other states with suitable locations they will produce the movie there. The state isn’t lining movie stars pokets with money they wouldn’t otherwise be making, it is convincing them to make that money here (pay taxes on that money here) and share a much larger pile of money (the rest of the production budget) with Massachusetts residents. Both full time production industry crew members and thousands of other businesses and residents who benefit in myriad financial, cultural and social ways.
    On the issue of promoting long term employment, while not a bad thing, I hope it isn’t done at the expense of temporary employment. I make a good living working on projects that range from a single day to 3 months. In today’s economy this type of employment is common across many industries. People who choose to work this way should not be penalized in order to benefit those with positions that remain with one employer for a long time.

Comments are closed.