Issues over tax credits resolved
BOSTON — The logjam on Beacon Hill over tax credits for film production has been broken, according to Speaker of the House Sal DiMasi, who called a news conference Monday to announce the state House could be passing the break as early as today.
“I’d like to see the bill on the governor’s desk before we recess at the end of the month,” DiMasi said.
While it is expected to have clear sailing through both legislative chambers, he noted Senate passage is out of his hands. Should there be a delay, he said, final action would take place no later than September.
The package offers up to $7 million in tax credits per production plus additional breaks. According to Rep. Tom O’Brien, who authored the package, it will “immediately put Massachusetts in the top three states competing for work.”
Among the items that are included:
? a production tax credit of 25% when in-state production costs exceed 60% of the film’s expenses. The credit could be applied over a five-year period.
? a payroll tax equal to 15% of aggregate payroll for Massachusetts residents employed by a $250,000 to $10 million production. Productions over $10 million would be eligible for a credit of 20%. (This would not include above-the-line star salaries.)
? exemption of state sales and use taxes for companies that spend at least $250,000 in a 12-month period for one or more productions.
? continuance of “fee free” use of state-owned buildings and locations.
To demonstrate support of the top leadership for the bill, DiMasi was joined not only by O’Brien and top committee chairs but also locally based film director Sam Weisman and actors Chris and Marianne Cooper. Weisman directed “What’s the Worst That Can Happen?” in Massachusetts in 2000. Since then, only one film has shot entirely here, Clint Eastwood’s “Mystic River.”
Adams mini elsewhere
Legislators spoke of being chagrined that such Massachusetts-themed productions as the HBO miniseries on John Adams will be shot elsewhere. The kicker was when the Boston-set “The Departed” chose to shoot mostly in New York since tax incentives made it cheaper to work there.
“Departed” executive producer Mac Brown estimated pic’s six weeks in Boston led to expenditures of $375,000 per day, or about $10 million-$15 million. Meanwhile, production will spend more some $25 million-$40 million for a longer shoot in New York.
It was more personal for state Rep. Brian Wallace. He sold an option on a Boston true-crime book he co-authored (“Final Confession”). He was told it would have to be shot elsewhere because the producers thought Massachusetts too expensive without tax breaks.
O’Brien said he first became interested in the issue when the Coopers, who are in his district, talked about the difficulty of getting films to shoot in Massachusetts. He offered what he termed a “conservative” estimate of $77 million in new business for the state in the first year of the tax breaks, going up to $215 million in year three.
Director Weisman assured local press that this wasn’t pie in the sky. “All of the major studios now have executives who do nothing but handle tax incentives,” he said. He claimed there were productions ready to be greenlit for Massachusetts once the credits are in place.
The patchwork of state tax laws benefiting the film industry is a fairly recent phenomenon, as states try to lure productions that might otherwise shoot in Canada. Louisiana passed an investment tax credit and saw production skyrocket from about $20 million to $300 million. As other states followed suit with their own models, DiMasi said, Massachusetts was “seriously lagging behind.”
The message DiMasi hopes to send Hollywood, assuming quick Senate action and Gov. Mitt Romney following suit, is: “Massachusetts is back and open for business.”