In a new report by the Massachusetts Department of Revenue (DOR), the tax credit program implemented for movies being produced in the state has generated $676 million since 2006, $100 million over the predicted amount in a March 2008 DOR estimate. The report also stated that it had granted $167 million in tax credits from 2006-2008 (the initial three years of the program) which, compared to the state’s projected economic output, would translate to 16 cents per every dollar earned once all redeemable credits are used.
According to the Massachusetts Film Office, the DOR report stated that the $676 million received from movie producers came at no cost to Massachusetts taxpayers. In fact, due to the policy that the filmmakers must spend money (and pay taxes on the spending) in Massachusetts before redeeming their credits, the state collected $3.6 million dollars more in taxes than it dispersed in credits. In addition, 60% of all the new direct and indirect jobs created by the movie productions went to Massachusetts residents since the beginning of the project, a number that the DOR predicts to increase as the industry matures. Since the beginning of the program of 2006, direct employment of Massachusetts residents in film production increased by 537%.
Many experts speculate that, though the current numbers of the study have been positive, the tax credits dispersed versus the total amount earned may be as low as five cents per dollar. The DOR report, in comparison with other similar reports released by Ernst & Young and Economic Research Associates, omitted the local effects of taxes, fees, and production, such as the impact of the development, construction and operation of new sound stages as well as the film related tourism and the marketing and promotion of Massachusetts generated from the film.
The attempt to bring movie production to Massachusetts has been generally successful. The Motion Picture Association of America (MPAA) stated in its April economic impact report that Massachusetts ranks among the top ten states in film production behind California and New York, the only New England state to do so. Some of the Massachusetts cities that have been featured in films are Boston, Salem, Lowell, Lynn, Burlington, Hull, North Andover, Plymouth, Gloucester, Worcester, Taunton, Medfield, Milton, and Essex. Since 2006, over two-dozen films have been shot in Massachusetts, not to mention the half a dozen films scheduled to shoot in early 2009. This includes Kevin Costner and Ben Affleck’s new film, The Company Men and two new films by Adam Sandler.