October 4, 2005
CONNECTICUT FILM INDUSTRY INCENTIVES
By: John Rappa, Principal Analyst
You wanted to know how Connecticut supports the film industry.
Connecticut supports film companies by helping them identify sites for shooting films and obtaining state and local permits. It also the film industry by exempting materials and equipment used to produce and broadcast films. Information about these incentives is available at (http://www.cultureandtourism.org/film/about.html). Broadcasters that also produce and broadcast films for television may also benefit from a 2000 law that changed the method for determining their corporate business taxes.
Connecticut Commission on Culture and Tourism's Film Division provides information and technical assistance to film, television, and media companies. It maintains an on-line directory of Connecticut-based production companies and contractors and a location gallery featuring properties available for filming movies. The division also helps producers secure state and local permits.
Sales and Use Tax Exemptions
People and businesses pay no sales and use taxes when they purchase, store, use, or consume:
● any filmed and taped television and radio program;
● materials that are part of a film or tape used to produce and transmit finished programs that
n a television or radio station broadcasts to the general public or
n are used for accredited medical or surgical training;
● motion picture or video production equipment or sound recording equipment used in Connecticut to produce part of a master tape, record, video tape, or film for commercial entertainment, advertising, or education; and
● antenna and other equipment that television and radio stations use to broadcast programs to the general public (CGS § 12-412(44)).
Property Tax Exemptions and Corporate Business Tax Credits
Businesses pay no property taxes for five years on newly acquired machinery and equipment used to produce motion pictures, videos, or sound recordings (CGS § 12-81(72)).
They also qualify for real property tax exemptions and corporate business tax credits if they develop facilities and create jobs in a locally designated entertainment district. (Bridgeport, New Britain, Stamford, or Windham have designated these districts). They qualify for these benefits if they use the facility to produce entertainment products or air, display, or provide live entertainment for stage or broadcast.
The incentives are the same as those for manufacturers and certain financial firms that develop facilities and create jobs in the state's 17 enterprise zones:
● five-year, 80% real property tax abatement (CGS § 12-81 (59)) and
● 10-year, 50% corporate business tax credit for companies that create at least 150 new jobs or fill 30% of its new jobs (regardless of the total) with district or town residents who qualify for federal job training assistance (12-217e).
Broadcasters, including those that produce films to be shown on network, cable, or satellite television, benefit from a 2000 law that changed the method for determining their corporate business taxes. That law allowed them to apportion their net income for these taxes based only on their gross receipts from sales in Connecticut versus their out-of-state sales (CGS § 12-218). Consequently, broadcasters with lots of property and employees in the state pay less corporate taxes if most of their sales are outside Connecticut. Prior law required them to apportion their net income by using a three-factor formula that included sales, the value of their tangible property in Connecticut, and their payroll here.