Massachusetts issued $92.8 million in film tax credits in 2023, according to preliminary data from the state — the largest film industry subsidy issued in a given year since before the pandemic.
The state’s film tax credit program is designed to draw motion picture productions to Massachusetts by offering to pay one-quarter of the cost to make movies, television programs and commercials. The state gives production companies tax credits that they can in turn sell to banks, insurance companies and others to reduce their taxes.
The controversial program has been lauded by supporters for bringing film industry jobs to Massachusetts, and criticized by economists and watchdog groups for subsidizing Hollywood at substantial cost to taxpayers. Last year, the box office flop “Don’t Look Up,” which was partly filmed in Massachusetts, made headlines for receiving a record $46 million in taxpayer-funded film incentives from the state.
WBUR filed a request for information with the Massachusetts Department of Revenue in July, asking for data about film productions that received tax credits in 2023. The preliminary data shared with WBUR — which is subject to change — says that the state issued tax credits to 250 film, television and commercial productions shot in Massachusetts. Two projects together accounted for a little over half of the credits given out: the 2024 Marvel movie “Madame Web,” which qualified for $23,688,438 in tax credits, and the television miniseries “Dexter: New Blood,” which qualified for $22,994,092 in tax credits.
All told, Massachusetts issued $92.8 million in tax incentives in 2023. But most of those credits were for productions filmed during the two years prior — for instance, “Madame Web” was shot in 2022. Film industry workers say this post-pandemic production boom is already over.
“ ’23 and ‘24 are probably the worst years we’ve had since 2010,” said Chris O’Donnell, business manager for the International Alliance of Theatrical Stage Employees Local 481. “ Our workday and wage numbers for those two years, they’re down 80%.”
O’Donnell said that the Writers Guild of America and SAG-AFTRA strikes were partly responsible for the drop in production nationwide. But he also said that many productions were moving overseas, where incentive programs and lower overhead costs have made filmmaking cheaper.
“In an even more global, competitive market, I think Massachusetts may need to step back and say… do we need to improve this program to remain competitive?” O’Donnell said.
For supporters of the film tax credit, improving it would likely mean increasing the tax credits offered to productions — a proposition all but guaranteed to earn the ire of the program’s skeptics, given that the incentive generates only 14 cents in tax revenue for every dollar it costs.
“Like it or not, [these programs] don’t pay for themselves,” said Michael Thom, a professor at the University of Southern California who has published several papers critical of film tax incentive programs. “That money has to come from somewhere else. And that means they have to raise taxes somewhere else or cut spending somewhere else, or possibly both.”
The state’s film tax credit program, which launched in 2006, allows productions that meet certain thresholds to claim tax credits amounting to 25% of payroll costs and 25% of production costs. Films can then use the credits to offset any taxes they owe in Massachusetts — though most productions end up owing very little in state taxes and instead opt to sell the credits or collect a partial reimbursement from the state. Typically, between 80% and 90% of film tax credits get sold to insurance companies, banks and corporations to reduce their own state taxes.
Studies by the Massachusetts Department of Revenue show that the program creates jobs, while also costing far more taxpayer dollars than it generates through increased economic activity. A state report looking at the first 11 years of the program calculated that film, television and commercial productions added a net total of $615.5 million to the state economy and 6,341 jobs for Massachusetts residents — but ultimately cost taxpayers $652.8 million. It estimated that the program created one job for every $102,945 spent by the state, well over the median wage for each job created. The same report noted the median wage for Massachusetts residents was $67,616.
Film tax credit programs have also been the target of graft. In 2012, a movie director pled guilty to fraudulently claiming $3.6 million in tax credits on Massachusetts productions. The fraudulent credits were sold to Wal-Mart and Bank of America, which were allowed to keep the subsidies. In Iowa, a film producer was sentenced to 10 years in prison for claiming fraudulent credits. The state’s film tax credit program was later shut down.
But film industry insiders say the Massachusetts film tax credit program creates production jobs that otherwise wouldn’t exist, and point to their own reports showing positive economic impacts. A study commissioned by the film industry advocacy nonprofit Massachusetts Production Coalition, which analyzed the first season of “Castle Rock,” estimated the show generated $69 million in economic activity and created 1,026 jobs during the 12 months it was in production in Massachusetts.
O’Donnell, who helped found the coalition to advocate for the film tax credit program in the early 2000s, said that tax incentives are responsible for much of the growth the state’s film industry has seen in the last two decades. In that time, his own union grew from 350 members to around 1,300.
“The employment numbers have only improved over time,” O’Donnell said. “Back when I started this job in 2003, the productions would bring in an army of people, and we would get entry level positions. And now, you can pretty much staff an entire production here top to bottom without having to bring people in.”
The program is popular among many state lawmakers, who voted to make it permanent in 2021.
“Massachusetts’s film industry has made a significant contribution to the state’s economy, generating over $3.2 billion in economic activity since 2006 and supporting the creation of thousands of jobs,” a spokesperson for the Massachusetts Film Office said in a statement. “High-profile productions like ‘Castle Rock,’ ‘The Society,’ and ‘Little Women’ have employed hundreds of local residents. Beyond job creation, these productions play a vital role in hospitality and tourism by showcasing the state’s diverse landscapes and culture, contributing to sustained economic growth.”
Last year, the state passed a live theater tax credit aimed at attracting national theater productions to Massachusetts. The program applies to shows headed to Broadway, off-Broadway or on national tours and cannot exceed $7 million per year.
