State lawmakers approved changes to the state’s film and digital media tax credit programs, extending a lucrative credit-transfer provision through 2027 while creating a new incentive aimed at attracting productions to Bridgeport, Hartford and New Haven.
The changes were included in the revised state budget package adopted by the General Assembly during this year’s session that ended May 6.
Under the legislation, certain transferable film tax credits can continue to be redeemed at up to 92% of their value through the 2027 tax year, instead of reverting to a lower 78% rate.
The higher redemption rate preserves more value for corporations that purchase the credits, which are commonly sold by film production companies to insurers and other large taxpayers seeking to offset state tax liabilities.
Lawmakers also created a supplemental film and digital media production credit for projects that spend at least one day filming in Bridgeport, Hartford or New Haven.
The added incentive provides credits ranging from 30% to 50% of eligible Connecticut expenses, depending on in-state spending, with productions spending more than $1 million qualifying for the maximum credit. The program would apply during the 2027 and 2028 tax years, with a total cap of $1.5 million, beginning July 1, 2027.
Chris Davis, vice president of public policy for the Connecticut Business & Industry Association, said the changes make Connecticut “significantly more competitive” in attracting TV and film productions while driving real economic activity in some of the state’s largest cities.
He said the changes send “a clear signal that Connecticut is committed to remaining a premier hub for film and digital media production.”
Connecticut has long offered transferable tax credits for film production, digital animation and film infrastructure projects. The incentives have helped generate jobs and economic activity tied to productions filming here, advocates say.
The program has faced persistent criticism, though, from fiscal watchdogs and some lawmakers who argue the credits reduce state tax revenue while producing uncertain long-term economic benefits.
According to recent analyses, insurance companies alone claimed roughly $57.7 million in Connecticut film tax credits in 2023.
The Office of Fiscal Analysis said extending the higher 92% redemption rate would reduce state revenue by allowing credit buyers to offset a larger share of their tax obligations.
The film-related provisions were included in the wide-ranging budget implementer bill that also increased municipal aid, expanded child care funding, revised hospital tax policies and made other changes to state tax law and spending policies.
The revised budget package passed despite concerns from some lawmakers and business groups that the state was relying too heavily on spending-cap exemptions and tax-credit expansions.
