I say CUT!
"Studios’ credits let others cut taxes; Reselling waivers is big business" January 03, 2012|By Todd Wallack, Globe Staff
Most tax credits issued by the state to film production companies end up being sold to brokers, which then resell them at a profit to financial firms, other corporations, and wealthy individuals to slash their tax bills.
At the same time the cop, firefighter, teacher, and secretary are told to pony up more for that health care and pension plan, etc, etc, etc.
At least 96 percent of the $265 million in tax credits used to attract movie and television productions to Massachusetts were sold by the film companies between 2006 and 2010, according to the state Department of Revenue.
Is that REALLY WHERE you wanted your TAX MONEY GOING, fellow citizen?
The incentives are so generous - rebates of up to 25 percent of production costs in the state - that most film companies do not end up owing nearly enough in taxes to use the credits. So they sell them at a discount, fueling a booming industry for brokers, accountants, and savvy taxpayers.
Yeah, in this case they are just savvy taxpayers, not thieves.
The trade in credits is sparking new criticism of the economic development program.
“The public assumes that the film tax credits are going to the film industry to bring jobs - not to Walmart,’’ said Deirdre Cummings, legislative director for the Massachusetts Public Interest Research Group, an advocacy organization based in Boston. “I think the general public would have a problem with that.’’
I do, and I am the general public.
Companies and individuals use tax credits to reduce tax bills. For example, a $1 million credit reduces a company’s tax payment by that amount....
I'm wondering how many cops, teachers, and firefighters that would pay for.
A production company that is awarded $10 million in tax credits might sell them to a broker for $8.7 million. The broker then sells the credits to a financial company that owes state incomes taxes for a bit more - say for $9 million, earning the broker a $300,000 profit.
Yeah, he "earned" that.
The financial firm can then claim the full $10 million in credits on its tax return, saving $1 million.
The practices were highlighted last month when prosecutors charged a Cape Cod filmmaker, Daniel Adams, with fraudulently obtaining $4.7 million in credits for the films “The Golden Boys’’ and “The Lightkeepers.’’
I haven't seen either, and won't.
Related:
Filmmaker faces tax fraud charges
Grand jury indicts Cape filmmaker in tax credit case
More on Mr. Adams below.
Prosecutors said Walmart Stores Inc. and Bank of America Corp. bought the credits through a broker to reduce their taxes.
Is that REALLY WHERE YOU WANTED YOUR TAX MONEY GOING, fellow citizen?
The companies do not report how much they earn in Massachusetts or pay in taxes in the state. The state Department of Revenue generally does not disclose how much individuals and corporations pay in taxes because of confidentiality laws.
Bank of America declined to comment. Walmart said it “makes every effort’’ to comply with state laws.
Other companies confirmed they buy film tax credits. One of the largest insurers in the state, Hanover Insurance Group of Worcester, has purchased “small amounts’’ of tax credits in recent years. Kahn, Litwin, Renza & Co. Ltd., an accounting firm with offices in Boston and Providence, buys film tax credits to help clients lower their tax bills, said Robert D’Andrea, a principal with the firm.
Officials in Governor Deval Patrick’s administration declined to say whether the governor supports film and other transferable tax credits, which can be sold to investors. A state commission is studying the issue, and the administration is awaiting the findings, to be reported in April, said Alex Zaroulis, a spokeswoman.
That is just a STALL so the STATE CAN CONTINUE TO SHOVEL TAX MONEY AWAY for as long as possible!
Amazing how THIS LAW CAN NOT be REOPENED, RENEGOTIATED, or RESCINDED, but PUBLIC WORKER UNION CONTRACTS CAN!!
“We are focused on making sure the tax credits work,’’ she said.
Here's a clue: They don't.
Massachusetts, one of about three dozen states that provide film incentives, began offering tax credits in 2006 to lure movie and television productions to the state, create jobs, and boost the economy....
Suckers (or a deliberate effort to shift wealth)!
Film incentives are not the Bay State’s only transferable tax credits, which are frequently used to help nonprofits and small companies not yet earning significant profits.
The state allows companies to sell credits for so-called brownfield development on former industrial sites; historic rehabilitation; building low-income housing; and manufacturing medical devices. This fiscal year, the state expects to spend more than $200 million on transferable credits, including $80 million for film companies.
I'm wondering what your town or city could do with $200 million -- or even ONE PERCENT of that, Massachusetts citizen. That would buy a lot in my poor, pos town.
Critics say the state could save millions of dollars a year by converting the tax credits to a grant program that provides direct subsidies equivalent to the 87 percent value that film companies typically receive. That would cut out brokers and buyers who pocket the rest....
I don't see that happening in the corporate-controlled culture known as politics. That's where the campaign contribution$ come in, if you know what I mean.
Such a system would allow the public to know who benefits from the subsidies. For the most part, the names of tax credit buyers are kept secret because of privacy laws....
Many brokers and film companies, however, say the current system works fine....
They would say that, wouldn't they?
--more--"
And it's all worth it for this very reason:
"A sharper lens on the buyers" January 05, 2012
The film credit has a bad rap among state budget watchdogs, but it does boost the image of the state.
(Sigh)
While many films that are produced locally tend to focus on Boston’s seamy underbelly - on, for instance, bank robbers who careen unpredictably through the narrow streets of the North End - the overall image of Boston that emerges is of a storied place with an intriguing history....
Those robbers in the movies are nothing compared to the real robbers over at State Street.
--more--"
So how about it, Massachusetts taxpayers?
Is it worth it?
"Fewer films made in Mass.; But officials say 2011 numbers are better" November 16, 2011|By Johnny Diaz, Globe Staff
Massachusetts gave fewer tax breaks to movie companies last year, largely due to a drop in the number of feature films made here, according to a new report from the state’s Department of Revenue.
In 2010, about $15 million in state tax credits were granted to 83 productions, including features, commercials, and television series - an 82 percent drop from the $83 million in credits granted in 2009, a banner year for movies made in Massachusetts. The main reason: Only six feature films were shot here last year, down from 13 in 2009.
All while SOCIAL SERVICES were being SLASHED, dear readers.
There were several factors leading to the decline, including the slow economy, increased competition from 37 other states offering tax incentives to attract filmmakers, and last year’s reorganization of the state film office, the report said.
“Some of it was with the economy, and some of it was a transition year’’ for the Massachusetts film office, said Greg Bialecki, the state’s secretary of housing and economic development. “We were not sending a consistent message to the industry about our desire to get films here and our enthusiasm about that.’’
I'm not enthusiastic about them at all. Why are these guys itching to throw your hard-earned tax dough away at a profitable industry?
Established in 1979 to promote Massachusetts as a filming location, the independent Massachusetts Film Office was folded into the state Office of Travel and Tourism last October. Film office director Nicholas Paleologos lost his job in the restructuring.
See: Patrick Cuts Paleologos
Last May, the state hired Lisa Strout, a Lexington native and former director of the film division in New Mexico’s Economic Development Department, as a replacement for Paleologos....
See: The Mass. film industry’s cheerleader
BOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!!!!
A number of films and other productions have been filmed here since 2006, when the state introduced tax breaks for films shot in Massachusetts. That program reimburses about 25 percent of the production costs for movies, television series, and advertisements filmed in the Bay State in the form of refundable tax credits....
--more--"
Related: Uniting With Hollywood
Oh, they don't have to pay the sales tax that was raised on all of the rest of us?
Btw, did they really need that loot?
MSM Monitor Movie Matinee
The Massachusetts Oscars
But Hollywood helps Mass. workers, right?
Also see:
Fla. man gets 15-year sentence in Plymouth Rock Studios scam
The Plymouth Rock Preview
That's a Wrap, Plymouth!
Back to Mr. Adams:
"Producer leaves Cape feeling fleeced; Moviemaker accused of faking expenses also left a trail of creditors" December 17, 2011|By Beth Healy and Kathleen Pierce, Globe Staff | Globe Correspondent
BARNSTABLE - To many, Daniel Adams seemed like a good neighbor. An engaging filmmaker, he kept a yacht in Hyannis and made his movies locally, promising business for merchants and Hollywood sizzle for residents during the slow winter season.
Not the first time a town has been took by Hollywood glitz and glitter.
But Adams, indicted this week on charges of defrauding the state of $4.7 million in tax credits, has left a trail of unpaid bills and anger in his wake, according to interviews and court records.'
That's YOUR MONEY, taxpayers!!
From failing to return valuables to antique dealers to stiffing landlords and limousine drivers, Adams has earned a reputation as a deadbeat from Barnstable to Martha’s Vineyard....
There are a lot of those roaming around.
Under the law, filmmakers can apply for a credit of 25 percent of their production expenses....
And then sell 'em for a profit.
Adams charmed scores of people over more than a decade. He projected the trappings of wealth, boasting about a family trust fund, a Harvard education, and ties to Ted Kennedy. Yet his reality was starkly different: A University of Vermont dropout who twice filed for bankruptcy, struggled to finance his movies, and owed hundreds of thousands of dollars to vendors, merchants, and a former girlfriend....
Maybe someone will help him out and make a "Dan Adams" movie.
--more--"
Or maybe they could choose another plot and cast of characters:
"Study says big firms avoid state taxes" December 08, 2011|By Beth Healy, Globe Staff
Sixty-eight out of 265 Fortune 500 companies across the country paid no state corporate income taxes in at least one of the last three years, according to a new report.
The companies included in the study - including EMC Corp. and Raytheon Co. of Massachusetts - earned a combined $1.33 trillion in profits over the last three tax years and managed to shelter at least half of their profits from state taxes, according to Matthew Gardner, executive director at the Institute on Taxation and Economic Policy and a coauthor of the report.
The study was released yesterday by the institute, a Washington nonprofit that advocates on behalf of consumers in tax matters, and the Boston-based Massachusetts Public Interest Research Group, also a nonprofit advocacy group.
According to the study, EMC, the Hopkinton computer storage giant, paid $7 million in state taxes across the country, or a rate that averaged 0.3 percent, from 2008 through 2010. That’s well below the 8.25 percent corporate tax rate in Massachusetts and the average corporate tax rate for states of 6.2 percent, according to the study.
Also see: EMC Moving Out of Massachusetts
North Carolina i$ giving them a better deal.
Raytheon, the Lexington defense contractor, had a three-year rate of 2.3 percent, according the report. Thermo Fisher Scientific Inc., a Waltham maker of analytical instruments and lab equipment, paid a rate of about 4.4 percent over the three years.
Raytheon spokesman Jon Kasle said the company “fulfills its tax obligations in compliance with tax laws and pays its taxes when they are due. This study is based on select pieces of data over a fixed period and is lacking in comprehensive analysis.’’
****************************
Corporate tax rates are falling in many states, as local governments try to attract and keep businesses and jobs. The Massachusetts corporate tax rate is scheduled to drop to 8.0 percent on Jan. 1. It’s been coming down from 9.5 percent in 2009....
But the SALES TAX WENT UP -- so banks could get paid?!
--more--"
Also see: State awards $6.7m in tax credits
I oppose it all, sorry.
Related:
Massachusetts' Lost Decade of Jobs
Those Are the (Tax) Breaks in Massachusetts
Are you REALLY getting your money's worth, Massachusetts taxpayers?
