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House OK’s $5m in tax credits for theater shows
By Jon Chesto and Katie Johnston
Globe Staff

The controversial film tax credit program has long been a source of tension, with some on Beacon Hill championing it as key to a thriving industry and others denouncing it as a waste of taxpayer money.

Now state lawmakers are proposing extending similar credits to high-profile theatrical productions staged in Massachusetts, with the House voting Thursday to include the legislation in a broader economic development bill.

The move comes as Governor Charlie Baker has criticized the film tax credit program and unsuccessfully tried to pare it.

Unlike the movie credits, those for plays and musicals would be capped at $5 million per year. The program would expire on Jan. 1, 2022.

Eligible theatrical productions could get tax credits equal to 35 percent of their Massachusetts payrolls, as well as credits equal to 25 percent of other expenses, including transportation. (The salaries of out-of-state actors wouldn’t be eligible, another difference from the film tax credits.)

“This is a boost for our creative economy here in Massachusetts, and particularly Boston, and it’s long overdue,’’ said Representative Nick Collins of South Boston, who pushed the amendment alongside Representative Paul McMurtry of Dedham.

A similar tax credit was included in an economic bill that the Legislature passed in 2014, but it was vetoed by then-Governor Deval Patrick.

Josiah A. Spaulding, chief executive of the Citi Performing Arts Center, which operates the Wang and Shubert theaters, said the program would bring more big, lucrative shows to the area.

“These tax credits will make Massachusetts a more attractive destination for pre-Broadway productions, national tour launches, and world premiere performances — further strengthening the state’s cultural economic engine,’’ he said in a statement.

Collins said the cap has been increased from $3 million to $5 million and eligibility has been widened to include not just pre-Broadway productions, pre-off Broadway productions, and “Broadway Tour’’ launches but also premieres of original stage productions.

And productions staged in auditoriums with as few as 350 seats could be eligible, compared with a previously proposed minimum of 600.

Another change Collins cited: Beneficiaries would need to deposit an amount equal to 15 percent of their tax credits into the Massachusetts Cultural Council Facilities Fund. The council, in turn, would use the money to address workforce development and the sustainability of the Massachusetts live theater industry.

Collins said a number of other states, including Louisiana and Rhode Island, have enacted similar tax credit programs, siphoning away high-profile productions that may have come here.

Senator Jamie Eldridge, Democrat of Acton, said that he and a number of his colleagues are against the theater tax credit and are considering filing an amendment to limit the film tax credit and other tax breaks as well.

“I think there is a very strong recognition in the Senate that at a time when we just cut $413 million out of the state budget, and we’re looking ahead to possible further budget cuts by Governor Baker, to expand or to add new tax breaks is not fiscally responsible,’’ he said.

Representative Jay Kaufman, a Lexington Democrat, noted that the state Department of Revenue found that each new local job created by the film tax credit cost the state nearly $110,000.

“If the goal is economic stimulus, if the goal is cultural stimulus, there’s just a terrible return on investments from tax credits of this sort,’’ Kaufman said. “I like theatrical productions and good movies as much as anybody. The question is whether the taxpayers should be funding them. And my answer is a clear no.’’

Even if the proposal survives the Senate, it faces the possibility of a veto when it arrives on Baker’s desk. Baker spokesman Billy Pitman declined to comment on the tax credit, saying only that “all legislation reaching the governor’s desk will be carefully reviewed.’’

Lawmakers adjourn from formal sessions for the year on July 31, making it essentially impossible to overrule any vetoes past that date.

“It’s a different bill, a broader bill, a more impactful bill [than the one Patrick vetoed],’’ Collins said. “I’m hoping that this governor sees the merit in it.’’

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.