1 of 1
SENATE DOCKET, NO. 1397 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 1764
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Nick Collins
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act creating a pilot program to enhance economic and community development through live
theatrical arts.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Nick CollinsFirst Suffolk 1 of 9
SENATE DOCKET, NO. 1397 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 1764
By Mr. Collins, a petition (accompanied by bill, Senate, No. 1764) of Nick Collins for legislation
to create a pilot program to enhance economic and community development through live
theatrical arts. Revenue.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 1816 OF 2021-2022.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act creating a pilot program to enhance economic and community development through live
theatrical arts.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 Section 6 of Chapter 62 of the General Laws, as appearing in the 2008 Official Edition, is
2further amended by adding the following subsection:
3 Section 38DD. There shall be established a pilot program for a live theater tax credit
4program under which a live theater company doing business with a Massachusetts based theater
5venue, theater company, theater presenter or producer may be eligible. The credit may be
6claimed against the taxes due pursuant to this chapter. The credit shall be established to support
7the expansion of pre-Broadway, National Tour launches of off-Broadway shows and pre off-
8Broadway live theater and Broadway tour launches and shall assist in the development of long
9run show development and growth. 2 of 9
10 (a) As used in this section the following words shall, unless the context clearly requires
11otherwise, have the following meanings:
12 “Commissioner”, the commissioner of revenue.
13 “Eligible theater production” means a live stage musical, dance or theatrical production
14or tour being presented in a qualified production facility, as defined in this chapter that is either:
15(a) a Pre-Broadway production, or (b) a pre off-Broadway production, or (c) a National Tour
16Launch.
17 “Eligible theater production certificate” means a certificate issued by the Massachusetts
18Office of Travel and Tourism certifying that the production is an eligible theater production that
19meets the guidelines of this chapter.
20 “Advertising and public relations expenditure” means costs incurred within the state by
21the Eligible theater productions for goods or services related to the marketing, public relations,
22creation and placement of print, electronic, television, billboards and other forms of advertising
23to promote the Eligible theater production.
24 “Office” means the Massachusetts Office of Travel and Tourism.
25 "Payroll" means all salaries, wages, fees, and other compensation wages including, but
26not limited to, taxes, benefits, and any other consideration incurred or paid to talent and non-
27talent employees of the applicant for services rendered within this state to and on behalf of an
28eligible theater production. The expenditure shall be incurred or paid by the applicant for
29services related to any portion of an eligible theater production from its pre-production stages,
30including, but not limited to, (a) the writing of the script, (b) casting, (c) hiring of service 3 of 9
31providers, (d) purchases from vendors, (e) marketing, (f) advertising, (g) public relations, (h)
32load in, (i) rehearsals, (j) performances, (k) other eligible theater production related activities, (l)
33load out; provided further, said labor expenditure shall be directly attributable to the eligible
34theater production and shall be limited to the first $100,000 of wages incurred or paid to each
35employee of an eligible theater production in each tax year.
36 “Pre-Broadway Production” means a live stage production that, in its original or adaptive
37version, is performed in a qualified production facility having a presentation scheduled for New
38York City’s Broadway theater district within (24) months after its Massachusetts presentation.
39 “Pre-Off Broadway Production” means a live stage production that, in its original or
40adaptive version, is performed in a qualified production facility having a presentation scheduled
41for New York City’s Off-Broadway s theater district within (24) months after its Massachusetts
42presentation.
43 “National Tour Launch” means a live stage production that, in its original or adaptive
44version, is performed in a qualified production facility and opens its National tour in
45Massachusetts.
46 “Production and Performance Expenditures” means a contemporaneous exchange of cash
47or cash equivalent for goods or services related to development, production, performance or
48operating expenditures incurred in this state for a qualified theater production including, but not
49limited to, expenditures for design, construction and operation, including sets, special and visual
50effects, costumes, wardrobes, make-up, accessories, costs associated with sound, lighting,
51staging, payroll, transportation expenditures, advertising and public relations expenditures,
52facility expenses, rentals, per diems, accommodations and other related costs. 4 of 9
53 “Qualified Production Facility” means a facility located in the State of Massachusetts in
54which live theatrical productions are, or are intended to be, exclusively presented that contains at
55least one stage, a seating capacity of one hundred seventy-five (175) or more seats, and dressing
56rooms, storage areas, and other ancillary amenities necessary for the Eligible theater production.
57 “Massachusetts Office of Travel and Tourism” means the office within the secretariat of
58economic development that has been established in order to market Massachusetts as a leisure
59travel destination in order to generate state and local tax revenues, create jobs, and support
60travel-related businesses.
61 “Transportation expenditures” means expenditures for the packaging, crating, and
62transportation both to the state for use in a qualified theater production of sets, costumes, or other
63tangible property constructed or manufactured out of state, and/or from the state after use in a
64qualified theater production of sets, costumes, or other tangible property constructed or
65manufactured in this state and the transportation of the cast and crew to and from the state. Such
66term shall include the packaging, crating, and transporting of property and equipment used for
67special and visual effects, sound, lighting, and staging, costumes, wardrobes, make-up and
68related accessories and materials, as well as any other performance or production-related
69property and equipment.
70 (b) Any person, firm, partnership, corporation, trust, estate or other entity that receives an
71eligible theater production certificate shall be allowed a tax credit equal to thirty-five percent
72(35%) of the total in state labor costs and twenty five percent (25%) of the production and
73performance expenditures and transportation expenditures as well as all out of state labor costs
74for the eligible theater production and to be computed as provided in this chapter against a tax 5 of 9
75imposed by this chapter. Said credit shall not exceed five million dollars ($5,000,000) and shall
76be limited to certified production cost directly attributable to activities in the state and
77transportation expenditures defined above. The total production budget shall be a minimum of
78one hundred thousand dollars ($100,000).
79 (c) No more than five million dollars ($5,000,000) in total may be issued for any tax year
80for musical and theatrical production tax credits pursuant to this chapter. If the total amount of
81allocated credits applied for in any particular year exceeds the aggregate amount of tax credits
82allowed for such year under this chapter, such excess shall be treated as having been applied for
83on the first day of the subsequent year.
84 (d) The tax credit shall be allowed against the tax for the taxable period in which the
85credit is earned and can be carried forward for not more than five (5) succeeding tax years.
86 (e) Credits allowed to a company, which is a subchapter S corporation, partnership, or a
87limited liability company that is taxed as a partnership, shall be passed through respectively to
88persons designated as partners, members or owners of such companies on a pro rata basis or
89pursuant to an executed agreement among such persons designated as subchapter S corporation
90shareholders, partners, or members documenting an alternate distribution method without regard
91to their sharing of other tax or economic attributes of such entity.
92 (f) If the company has not claimed the tax credits in whole or part, taxpayers eligible for
93the tax credits may assign, transfer or convey the tax credits, in whole or in part, by sale or
94otherwise to any individual or entity and such assignee of the tax credits that have not claimed
95the tax credits in whole or part may assign, transfer or convey the tax credits, in whole or in part,
96by sale or otherwise to any individual or entity. The assignee of the tax credits may use acquired 6 of 9
97credits to offset up to one hundred percent (100%) of the tax liabilities otherwise imposed
98pursuant to this chapter. The assignee may apply the tax credit against taxes imposed on the
99assignee for not more than five (5) succeeding tax years. The assignor shall perfect the transfer
100by notifying the commissioner of revenue, in writing, within thirty (30) calendar days following
101the effective date of the transfer and shall provide any information as may be required by the
102commissioner to administer and carry out the provisions of this section.
103 (g) For purposes of this chapter, any assignment or sales proceeds received by the
104assignor for its assignment or sale of the tax credits allowed pursuant to this section shall be
105exempt from tax under this title.
106 (h) In the case of a corporation, this credit is only allowed against the tax of a corporation
107included in a consolidated return that qualifies for the credit and not against the tax of other
108corporations that may join in the filing of a consolidated tax return, provided, however, that in
109the case of a corporation that files a consolidated return with one or more other corporations with
110operations in Massachusetts, the credit will be allowed to be included in a consolidated return
111with respect to such corporations with operations in Massachusetts only.
112 (i) The applicant or applicants shall properly prepare, sign and submit to the
113Massachusetts office of travel and tourism an application for initial certification of the theater
114production. The application shall include such information and data as the office deems
115reasonably necessary for the proper evaluation and administration of said application, including,
116but not limited to, any information about the theater production company or their related
117partners/presenters and a specific Massachusetts live theater or musical production. The office
118shall review the completed applications and determine whether it meets the requisite criteria and 7 of 9
119qualifications for the initial certification for the production and/or presentation. If the initial
120certification is granted, the office shall issue a notice of initial certification of the eligible theater
121production and/or presentation to the theater production company, co-producer or presenter and
122to the commissioner. The notice shall state that, after appropriate review, the initial application
123meets the appropriate criteria for conditional eligibility. The notice of initial certification will
124provide a unique identification number for the production/presentation and is only a statement of
125conditional eligibility for the production/presentation and, as such, does not grant or convey any
126Massachusetts tax benefits.
127 (j) Upon completion of an eligible theater production, the applicant or applicants shall
128properly prepare, sign and submit to the office an application for final certification of the eligible
129theater production. The final application shall also contain a cost report and an accountant’s
130certification. The office and commissioner may rely without independent investigation, upon the
131accountant s certification, in the form of an opinion, confirming the accuracy of the information
132included in the cost report. Upon review of a duly completed and filed application and upon no
133later than thirty (30) days of submission thereof, the commissioner will make a determination
134pertaining to the final certification of the eligible theater production and the resultant tax credits.
135 (k) Upon determination that the company qualifies for final certification and the resultant
136tax credits, the commissioner shall issue to the company: (1) an eligible theater production
137certificate; and (2) a tax credit certificate in an amount in accordance with section (b) hereof. A
138musical and theatrical production company is prohibited from using state funds, state loans or
139state guaranteed loans to qualify for the live theater tax credit. All documents that are issued by
140the office pursuant to this section shall reference the identification number that was issued to the
141production as part of its initial certification. 8 of 9
142 (l) The Massachusetts office of travel and tourism, in consultation as needed with the
143commissioner of revenue, shall promulgate such rules and regulations as are necessary to carry
144out the intent and purposes of this chapter in accordance with the general guidelines provided
145herein for the certification of the production and the resultant production credit.
146 (m) If information comes to the attention of the Massachusetts Office of Travel and
147Tourism that is materially inconsistent with representations made in an application, the office
148may deny the requested certification. In the event that tax credits or a portion of tax credits are
149subject to recapture for ineligible costs and such tax credits have been transferred, assigned
150and/or allocated, the state will pursue its recapture remedies and rights against the applicant of
151the theater production tax credits. No redress shall be sought against assignees, sellers,
152transferees or allocates of such credits.
153 (n) No credits shall be issued on or after January 1, 2026 unless the production has
154received initial certification under this section prior to January 1, 2026.
155 (o) The secretary of housing and economic development, in conjunction with the
156commissioner of revenue, shall make a report on the impact of the live theater pilot program and
157deliver report to the president of the state senate, the senate committee on ways and means, the
158speaker of the house of representatives, the house committee on ways and means and the joint
159committee on economic development and emerging technologies by December 31, 2025. The
160secretary and commissioner shall collaborate with the live theater industry to collect the relevant
161data for the report. Said report shall include but not be limited to the following information
162regarding live theater in Massachusetts during the pilot program:
163 1.) The number of shows that have come to Massachusetts since passage of this section. 9 of 9
164 2.) The number of live show days since passage of this section.
165 3.) Analysis of the number of shows and live show days after passage of this section as
166compared to before passage of this section.
167 4.) Total spending by live theater productions on local businesses and vendors including
168supplies, hotels, car rental, food and beverage, and items related to the live theater production.
169 5.) Total spending on local labor to set-up, support and take down each production
170including total work hours.
171 6.) The number of ticket orders from outside Massachusetts.
172 7.) The number of ticket orders from outside the United States.
173 8.) The impact on local businesses in proximity to live theaters including hotel room
174nights and restaurants.