Movie, TV production companies defend 30% tax credit

HARTFORD – Many state-based film and TV production companies are fearful that Gov. Ned Lamont’s proposed cut in the 30% film production tax credit would be devastating to their business and the state’s reputation as a go-to destination for movies and TV shows.

In a hearing before the state General Assembly’s Finance, Revenue and Bonding Committee Wednesday, Feb. 26, production companies and actors spoke out against the cut in the tax credit to 25%. The proposed tax credit cut, which is the third straight year it has been proposed, was shot down the past two years. Some form of the credit has been in place since 2006.

(For complete list of all the testimony, click here.)

“The great thing about the credit is an earned credit,” said Jonathan Black, co-owner of Newtown-based Chair 10 Productions along with his wife Lauren. “But what you might not know is that credit is put back into the budgets of production companies. It allows us to hire more people, shoot more days in the state.”

Instead of hiring 120 people, his company could hire 160, he said. And instead of shooting 20 days, his company could shoot 25 days.

“We don’t want to lower that credit by 5% and lose all that work we did last year and come up this year. (Because the lower tax credit would be retroactive). The proposed legislation by the governor would make this reduction retroactive. That means all of the work will got to New York.”

Lauren Black further explained the impact of the tax credit being retroactive.

“This tax credit proposal is retroactive to Jan. 1 of this year, meaning productions that are shooting right now are not going to get the tax credit that we were expecting,” she testified. “We were talking to Apple TV+. They are very interested in filming here. They were asking about the tax credit for a TV show. An Apple TV show, even if it’s just one season, nets $50 million for eight to 10 months of filming.”

She added that her company has two projects lined up for this year that could potentially lose that credit another $20 million in projects for the summer and fall that could walk away if the credit is lowered to 25%.

The so-called “haircut” in the film tax credit would reduce the top film production tax credit rate from 30% to 25%. Currently, the following rates apply for expenses that are incurred:  10% for expenses between $100,000 and $500,000; 15% for expenses between $500,000 and $1 million; and 30% for expenses over $1 million. The change would be retroactive to Jan. 1, 2025.

In 2007, Connecticut had one of the best tax credits on the East Coast, while competing municipalities in other states, like the city of Newburgh, has a 45% rate.

Due to the use of the tax credit, Jonathan Black said last year Chair 10 Productions hired more than 350 people and spent more than $10 million in the state. He added that his company’s work had a strong economic impact in the Danbury region. That included booking about 80 rooms at the Ethan Allen Hotel and renting more than 100 vehicles.

“Tarrywile in Danbury, which is owned by the City of Danbury, they do a lot of weddings and everything else. We actually rent that entire facility for over a month during their down time,” Jonathan Black said when answering a question from committee member Rep. Joe Polletta. “We give them thousands and thousands of dollars that were not going to be felt. It would have been non-booked, otherwise.”

Alessandro Andriciulli, who is Events Committee co-chair of the Connecticut Film and TV Alliance, also testified at the hearing.

“I’ve been speaking to a lot of producers over the past few months as I’ve been ramping up to this position as events committee co-chair,” Andriciulli said. “The main thing we all agreed upon is that much like a stock, when you go to invest in stocks and see a stock that is fluctuating up and down you are less likely to invest in that stock.

Veronica Sullivan, head of global production at NBC Universal, which operates the headquarters of NBC Sports and Stamford Studios in Stamford, and NBC Connecticut (WVIT) in West Hartford, testified that the tax credit program has had a long and profound impact on local vendors and suppliers, which have become integral to the state’s media industry.

“Across our NBCUniversal operations alone, we support over 500 different small businesses across the state,” she said. “Without them, NBCUniversal would not be able to produce our premier content from Connecticut.”

An actress who lives in Torrington described how her life has been affected by the higher tax credit rate.

“My 14-year-old has followed in my footsteps and he has acted in the Hallmark movies (in Connecticut) alongside me,” said Coryse Villarouel. “It’s been great to act with my son and share that moment. You are on set for 10-14 hours a day. It’s great and heartwarming to spend that time with him.”

She mentioned how the higher tax incentive for production companies has allowed for more job opportunities for actors who don’t have to travel to Massachusetts or New York City for work.

“The introduction of the Hallmark movie trail I saw as a positive step in recognizing what the industry has done for Connecticut and what it will continue to do,” she added. “Keeping it at 30% will be beneficial and keep us competitive with other states.”

One person who spoke in favor of the tax credit reduction was Carol Platt Liebau, president of The Yankee Institute.

“To be clear, the governor’s budget has many commendable features. It extends the bond lock to 2038,” she said in written testimony. “It reduces the film tax credit. It provides property tax relief for Connecticut residents. And it eliminates some occupational licensing fees to encourage small business growth and reduce employment barriers.”

Reducing the film tax credit would raise $9.2 million in FY 2026 and $17.1 million in FY 2027. That would be part of a tax revenue plan to raise $368.1 million in general fund revenue for 2026 and $594.7 million for 2027. In addition to trimming the film tax credit, the bill would increase the R&D credit exchange rate for biotech companies, and eliminate the digital animation tax credit.