A new state report says the Massachusetts film tax credit program generated more than $300 million in new spending in 2012, but, as in past years, most of that money flowed out of state.
The state Revenue Department said Massachusetts handed out nearly $79 million in film tax credits in 2012, generating $304 million in new spending. Of the $304 million, a third, or nearly $101 million, went to Massachusetts residents and businesses. The other two-thirds went to people or firms located outside the state, with $83 million going to nonresident actors and directors earning paychecks greater than $1 million.
Some of the films shot in Massachusetts in 2012 included The Heat, starring Sandra Bullock and Mellissa McCarthy; Grown Ups 2, and R.I.P.D.
The report estimates the state gave up nearly $94,000 in taxes for every Massachusetts job created. The cost was $50,647 for every non-Massachusetts job created. According to the report, those costs are lower than in past years. From 2006 through 2012, the state gave up on average nearly $119,000 in tax revenue for every Massachusetts job created and $64,000 in tax revenue for every non-Massachusetts job created.
Film production jobs pay fairly well. The report estimated the median wages of Massachusetts film workers was nearly $65,000 in 2012, slightly higher than the $62,400 paid to nonresidents, not including those actors and directors paid more than $1 million.
The state’s film tax credit offers companies that shoot films or commercials in Massachusetts tax credits equal to roughly a quarter of whatever they spend with no cap. The film companies themselves typically sell the tax credits at a discount to companies or individuals who use them to reduce their tax liability. For example, the report said insurance companies between 2006 and 2012 bought $200 million worth of tax credits for nearly $188 million, saving roughly $12 million.
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About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
A film studio is now up and running in Devens, which should increase production activity in the state. But the Revenue Department said the impact of the studio will not be known until its 2013 report is released. The agency gave no explanation in its report for the long lag time in reporting on the film tax credit.
The agency also said no actors or directors in 2012 paid taxes on residuals, which is income they receive after the release of a film. The Revenue Department said the lack of tax payments on residuals is the subject of ongoing analysis, but the agency says that every year.
