Filmmakers have sold off at least $335M in state film tax credits

http://www.bostonherald.com/news/local_coverage/2015/10/filmmakers_have_sold_off_at_least_335m_in_state_film_tax_credits



OPPOSED: State Sen. James Eldridge said the tax credit program needs to change.

Filmmakers have sold off at least $335M in state film tax credits
Matt Stout Monday, October 26, 2015

At least $335 million of the state’s controversial film tax credits have been sold off to corporations and individuals that critics say likely have nothing to do with the movie the perk was intended for, in a secondary market largely shrouded from public view, a Herald review of state records has found.

That massive sum of re-sold taxpayer largesse accounts for 82 percent of the $411 million in credits the state has issued to attract productions such as “Black Mass” and “Grown Ups 2” over the past decade. It’s a count experts say is likely low-balled, and the state has yet to release this year’s annual report on the tax credit, covering through calendar year 2013.

“The big loser is the Revenue Department,” said Bob Tannenwald, a former economist at the Boston Fed and now an adjunct lecturer at Brandeis University. “First of all, 82 percent is an underestimate because a good chunk of the tax credits that are currently being held by film producers will be ultimately sold on the secondary market. … And the fact that industries that have little to nothing to do with film production are buying them should catch the attention of policymakers and make them question whether the tax credits are good policy.”

Established in 2006, the film tax credit is a 25 percent rebate filmmakers earn if they spent at least $50,000 in Massachusetts. But many don’t end up owing enough in state taxes, and the credits are legally transferable, meaning that filmmakers can sell them — on average for 90 percent of their value.