Producers, Local Companies Oppose Proposal to Cut Connecticut Film Tax Credit

Industry representatives and Connecticut-based production companies urged the Finance, Revenue and Bonding Committee on Oct. 27 to reject a proposal in Senate Bill 1246 that would reduce the state's film, television and digital media tax credit from 30% to 25%.

Brian O'Leary, tax counsel for the Motion Picture Association, told the committee that Connecticut's 30% credit is at the national and international average and that lowering it would put the state at a competitive disadvantage. "We respectfully ask that no more changes are made to this program this year. Let the program continue to succeed on its current terms," O'Leary said.

The industry witnesses described recent growth in Connecticut's production sector and tied company relocations and payrolls directly to the tax credit. Laura Palumbo Johnson, co-owner of Megillah Entertainment, said her production company relocated to Stamford because of the digital media tax credit and estimated the company incurred $4.9 million in local expenditures in 2024, with growth expected in 2025. "A tax credit cut would surely shut that growth down and cause a chilling effect on companies considering relocating to Connecticut," she said.

Don Quijada, owner of a casting and production services business, said cutting the credit would reduce local hiring and contractor opportunities. "Cutting the tax credit would reduce the number of jobs available," he said, adding the change would stunt growth of Connecticut's creative economy.

Supporters of maintaining the current rate pointed to prior economic analyses: O'Leary cited a report showing roughly $2.7 billion in production activity attracted to Connecticut over a 10-year span and more than $680 million in gross value added in one year. Industry witnesses said other jurisdictions offer incremental add-ons or higher credits, and Connecticut's flat 30% has helped secure "blue chip" productions and new firms.

Committee staff and members did not take a vote during the hearing. No formal action on the bill was recorded in the public testimony taken that evening.

The bill language under discussion appears in Senate Bill 1246, a broader revenue and bonding package that several witnesses said contains unrelated provisions that also affect hospitals, occupational licensing and other sectors.

Speakers

Brian O'Leary, Tax Counsel, Motion Picture Association (business)

Laura Palumbo Johnson, Co-owner, Megillah Entertainment (business)

Don Quijada, Owner, casting and production services (business)

Nut graf: The proposed reduction of the film and digital media tax credit in SB 1246 prompted industry testimony warning that the change would undercut recent private-sector relocation and hiring in Connecticut, potentially shrinking local spending and jobs tied to film and television production.

Background and details: O'Leary told the committee that film incentive programs average 30% worldwide and that many jurisdictions add incremental bonuses for targeted activities; Connecticut's current structure is a flat 30%. He said a prior study found the incentive produced $2.7 billion in production activity over 10 years and $680 million in gross value added in a single year. Megillah Entertainment said its local payroll and vendor spending depend on the credit; the company reported $4.9 million in local expenditures in 2024 and projected growth.

Industry witnesses said a cut to the credit would make Connecticut less attractive compared with nearby states offering higher or more targeted incentives, including New Jersey, and could prompt companies to relocate or hire outside the state.

Ending: The committee heard multiple hours of testimony but did not vote during the public hearing. Lawmakers will consider SB 1246 as part of the broader budget and revenue deliberations this session; proponents and opponents alike said the film credit change carries direct economic consequences that state fiscal planners should weigh alongside other changes contained in the bill.