Film flops at box office after boffo state tax credit
The ghost cop movie, “RIPD,” starring Jeff Bridges and Ryan Reynolds, received nearly $27 million in state film tax credits last year on its way to becoming one of this summer’s biggest flops at the box office
The movie, filmed in Boston, Raynham, and Providence, accounted for more than 70 percent of film tax credits issued by the state last year and 17 percent of the nearly $160 million worth of transferable tax credits — which can be bought and sold — issued or awarded, according to a report released Tuesday by the state Department of Revenue.
“RIPD” tells the story of a recently killed cop who teams up with a group of undead peers working for the “Rest In Peace Department.” It cost an estimated $130 million to make, but grossed just $12.7 million, or less than half the value of its tax credit, during its opening weekend in mid-July, according to industry data.
Universal Studios, which released “RIPD,” could not be reached late Tuesday. The Massachusetts Film Office, which promotes the state as a film location, did not respond to requests for comment.
The report is the second issued since the Legislature enacted a law in 2010 requiring the agencies that oversee refundable and transferable tax credit programs to report not only the amount of the credits, but also their recipients, to the state Department of Revenue. The state issued or awarded transferable tax credits through 13 programs in 2012.
The recipients, including film companies, often sell the credits they receive through brokers to banks, insurance companies, and others seeking to lower their taxes.
Film tax credits accounted for the second-largest chunk of that money, with $36.5 million worth of credits issued.
More than $65 million was issued or awarded for historic rehabilitation, while another $17.8 million went to brownfield tax credits to clean up contaminated properties. About $17 million supported low-income housing.
The film tax credit has been particularly controversial. Supporters say it creates jobs, generates economic activity, promotes the state, and attracts tourists.
But critics say the economic impact is small — and purchased at too high a price. Since the film program was started in 2006, it has cost the state an average of $128,575 per job going to a Massachusetts resident, according to an earlier Department of Revenue study.
Noah Berger, president of the Massachusetts Budget and Policy Center, a Boston think tank that has studied Massachusetts’ incentive programs, said the state provides a very generous tax break to film companies — a credit equal to 25 percent of their payroll and production costs, as well as a sales tax exemption — but gets relatively little in return.
“Even if the movie does make any money, we don’t get back any of those profits,” Berger added. “The way the law works, you can make a movie and it can be great, terrible, popular, not popular . . . and we will simply pay 25 percent of the cost of making it.”Erin Ailworth can be reached at email@example.com. Follow her on Twitter @ailworth.