Commerce panel refers DECD tax-credit technical revisions to finance amid caution on production credit cut

House Bill 7,166, a package of technical revisions based on Department of Economic and Community Development (DECD) recommendations to certain tax-credit statutes including film production, research and development credits, was referred to the Finance Committee after committee discussion.

Committee members said most of the language before them was technical and intended to improve the administration and applicability of existing credits. Senator Buckley and other members urged caution about broader policy changes to the production tax credit, including a governor-proposed reduction from 30% to 25% of certain credits; Representative Buckley said such reductions could risk the state’s competitiveness and the growth of local film-related infrastructure.

Committee members discussed mechanics of the tax-credit market, including transfers of credits and how the credits are monetized by production companies that do not have Connecticut tax liability. A committee member asked whether proceeds from transferring credits would be taxed as income; staff indicated the tax treatment would depend on business structure and sourcing rules. Members flagged the need for more detail on the production-investment baseline (the bill would change a baseline threshold from $500,000 to $1,000,000 for some production investment measures).

The committee advanced the technical LCO (6,731) and referred the measure to Finance for the substantive fiscal and policy review. Representative Buckby registered a no vote to flag concerns about reductions to the film production tax credit; other members said they would vote to refer the measure while reserving questions for Finance.