State tax credits help cover stars’ pay

By Steve LeBlanc
Associated Press / January 13, 2011

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A quarter of the tax breaks given to movie companies under Massachusetts’ film tax credit program have gone to help filmmakers cover the paychecks of millionaire Hollywood stars.

An Associated Press review of a Department of Revenue report on the tax credit program found that $82 million of the $330 million in film spending eligible for credits in 2009 went to pay the salaries of nonresident actors earning more than $1 million.

Under the program a filmmaker can apply for a tax credit equal to 25 percent of a film’s production and payroll costs.

In 2009, film companies applied for a total of $82.4 million in credits in Massachusetts.

Critics have complained the state shouldn’t be giving what amounts to tax subsidies for Hollywood stars, but supporters say that without the program, there would be virtually no feature films shot in Massachusetts.

The Department of Revenue considers every feature film shot in Massachusetts in 2009 as new spending directly related to the tax credit program.

The report also said film companies paid more than $42 million in salaries and wages to local workers in 2009. Supporters of the film credit program said those jobs wouldn’t exist without the tax breaks.

“What we consider most important about the film tax credit is its long-term results, including the jobs created . . . in local businesses,’’ said Joe Maiella, president of Massachusetts Production Coalition, which represents the film industry.

Supporters of the tax break point out that movie stars do not directly receive a tax break. Instead the film companies that hire them are able to use their salaries, and other production costs, to request tax credits.