Bill Threatens Film Production Tax Credit

The state’s film production tax credit is under threat from a bill currently before the legislature’s Finance, Revenue, and Bonding Committee.

HB 5110 eliminates the tax credit, which is available to companies that produce qualified entertainment content wholly or in part in Connecticut.

Controversial since its inception in 2006, the tax credit covers activities that include the production of: (1) motion pictures, (2) television programming, (3) sound recordings, (4) music videos, (5) video games, (6) commercials (infomercials are ineligible) and (7) certain interactive websites.

Previous studies by the state Department of Economic and Community Development were mixed about the effectiveness and return on investment of the credits.

A 2022 state-commissioned study by Olsberg SPI found that for every dollar of tax credit outlay, there was $4.80 in additional value generated by the entertainment content production industry in Connecticut.

Rare for a proposed bill, House Majority Leader Jason Rojas (D-East Hartford) joined House Republican Leader Vincent Candelora (North Branford) to introduce the bill.

Opposition

CBIA and dozens of other businesses, industry employees, municipalities, and trade associations, including the Motion Picture Association, opposed the measure.

Unlike many other credits, the film production tax credit can be sold or transferred to other eligible companies.

The Insurance Association of Connecticut and the National Association of Mutual Insurance Companies opposed the bill, testifying that “Connecticut’s digital media tax credit appears to be one of the most popular tax credits that insurance carriers purchase.”

The ability to purchase these credits has made Connecticut more competitive across numerous industries.

This ability to purchase these credits has made Connecticut more competitive across numerous industries, helping create and retain jobs not only in entertainment content production but various other sectors.

The elimination of this credit will not only lead to significant losses in the entertainment content production industry and its vendors, but also likely lead to workforce reductions and lost investment in a number of industries.

The bill now awaits committee action by its April 4 deadline.

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For more information, contact CBIA’s Chris Davis (860.244.1931).