| Date: | 03/23/2026 |
|---|---|
| Organization: | Massachusetts Department of Revenue |
| Regulatory Authority: | Massachusetts General Laws |
| Official Version: | Published by the Massachusetts Register |
830 CMR: Department of Revenue
830 CMR 63.00: Taxation of Corporations
830 CMR 63.00 is amended by adding the following section:
830 CMR 63.38QQ.1: Live Theater Tax Credit
(a) Statement of Purpose. 830 CMR 63.38QQ.1 explains the rules for calculating and claiming the Credit available pursuant to M.G.L. c. 62 § 6(ff) and M.G.L. c. 63 § 38QQ. Regulations issued by the Executive Office of Economic Developmentsetting forth criteria for establishing eligibility for the Credit may be found at 400 CMR 10.00: Live Theater Tax Credit. The provisions of 830 CMR 63.38QQ.1 apply to Credits claimed for tax years beginning on or after January 1, 2025.
(b) Outline of Topics. 830 CMR 63.38QQ.1 is organized as follows:
(1) Statement of Purpose, Outline of Topics;
(2) Definitions;
(3) General Rule;
(4) Obtaining the Credit;
(5) Withholding and Reporting Requirements as Prerequisites for Credit Qualification;
(6) Carry Over of Unused Credit;
(7) Transfer of the Credit;
(8) Recordkeeping.
For purposes of 830 CMR 63.38QQ.1, the following terms have the following meanings:
Advertising and Public Relations Expenditure. A cost incurred within the commonwealth by an Eligible Theater Production for goods or services related to the marketing, public relations, creation and placement of print, electronic, television, billboards or other forms of advertising to promote the Eligible Theater Production.
Commissioner. The Commissioner of Revenue, or the Commissioner’s duly authorized representative.
Cost Accounting Report. A cost accounting of expenditures in connection with the Eligible Theater Production prepared and signed by the certified Eligible Company. Such cost accounting shall contain Eligible Production Costs, including Payroll Costs, Production and Performance Expenditures and Transportation Expenditures, and an accountant’s certification, in the form of an opinion, confirming the accuracy of the information included in the Cost Accounting Report. In computing Payroll Costs, Production and Performance Expenditures and Transportation Expenditures for which a Live Theater Tax Credit may be claimed, an Eligible Theater Production shall subtract any state funds, state loans or state guaranteed loans.
Credit. The live theater tax credit authorized pursuant to M.G.L. c. 23A, § 3M; M.G.L. c. 62 § 6(ff); or M.G.L. c. 63 § 38QQ.
Economic Impact Report. A report provided to the Office by an Eligible Company describing the direct and indirect economic impact of an Eligible Theater Production prior to the issuance of a Final Certificate. Such report may include, but is not limited to, jobs created and associated wages, theater ticket sales to domestic and international visitors, spending by live theater productions on adjacent businesses, wages paid for setting up and taking down productions, and impacts on hotels, restaurants and other businesses in proximity to theaters. the Office may from time to time specify in program guidelines the information required to be provided.
Eligible Company. An individual or business that produces, co-produces or presents an Eligible Theater Production with a Massachusetts-based theater venue, theater company, theater presenter or producer for the purpose of supporting the expansion of Eligible Theater Productions and assisting in the development of long run show development and growth within the Commonwealth.
Eligible Theater Production. A live stage musical, dance or theatrical production or tour being presented in a Qualified Production Facility that is either: (i) a Pre-Broadway Production; (ii) a Pre-Off Broadway Production; (iii) a National Tour Launch; or (iv) a Regional Professional Theater Production.
Final Certificate. The certificate issued by the Office to an Eligible Company pursuant to 400 CMR 10.05.
Independent Contractor. An individual treated as an independent contractor for Massachusetts tax purposes and contracted with and retained by an Eligible Company, such as artists, crew, actors, directors and producers, for the performance of services used directly in an Eligible Theater Production. It does not include entities retained by the production company to provide tangible property or outside contractor service, such as catering, construction, trailers, equipment and transportation.
Initial Certificate. A certificate issued by the Office, in consultation with the Commissioner, certifying that a production is an Eligible Theater Production that meets the rules or regulations of the Office and is eligible to claim a Credit in a specified amount, pursuant to section 3M of chapter 23A, upon receipt of a Final Certificate.
Loan-Out. A personal service corporation or other entity contracted with and retained by an Eligible Company to provide individual personnel, such as artists, crew, actors, directors and producers, for the performance of services used directly in an Eligible Theater Production, but not including entities retained by the production company to provide tangible property or outside contractor service, such as catering, construction, trailers, equipment and transportation.
National Tour Launch. A live stage production that, in its original or adaptive version, is performed in a Qualified Production Facility and opens its national tour in the Commonwealth.
Office. The Massachusetts Office of Business Development or any constituent office thereof.
Payroll Costs. All salaries, wages, fees and other compensation from sources within the Commonwealth, including, but not limited to, taxes, benefits and any other consideration incurred or paid to talent and non-talent employees of the applicant for services rendered within the Commonwealth to and on behalf of an Eligible Theater Production; provided, that the expenditure shall be incurred or paid by the applicant for services related to any portion of an Eligible Theater Production from its pre-production stages, including, but not limited to: (i) the writing of the script; (ii) casting; (iii) hiring of service providers; (iv) purchases from vendors; (v) marketing; (vi) advertising; (vii) public relations; (viii) load in; (ix) rehearsals; (x) performances; (xi) other Eligible Theater Production related activities; and (xii) load out; and provided further, that the Payroll expenditure shall be directly attributable to the Eligible Theater Production and shall be limited to the first $100,000 of wages incurred or paid to each employee of an Eligible Theater Production in each tax year.
Pre-Broadway Production. A live stage production that, in its original or adaptive version, is performed in a Qualified Production Facility having a presentation scheduled for the City of New York’s Broadway theater district within 24 months after its presentation in the Commonwealth.
Pre-Off Broadway Production. A live stage production that, in its original or adaptive version, is performed in a Qualified Production Facility having a presentation scheduled for the City of New York’s off-Broadway theater district within 24 months after its presentation in the Commonwealth.
Production and Performance Expenditures. A contemporaneous exchange of cash or cash equivalent for goods or services related to development, production, performance or operating expenditures incurred in the Commonwealth for an Eligible Theater Production, including, but not limited to, expenditures for design, construction and operation, including sets, special and visual effects, costumes, wardrobes, make-up, accessories, costs associated with sound, lighting, staging, Advertising and Public Relations Expenditures, facility expenses, rentals, per diems, accommodations and other related costs.
Qualified Production Facility. A facility located in the Commonwealth in which live theater productions are, or are intended to be, exclusively presented that contains at least one stage, a seating capacity of not less than 175 seats, dressing rooms, storage areas and other ancillary amenities necessary for the Eligible Theater Production.
Regional Professional Theater Production. A live stage production that is performed in a Qualified Production Facility with a professional cast and crew.
Transportation Expenditures. Expenses incurred in the Commonwealth for the packaging, crating and transportation both to the Commonwealth for use in an Eligible Theater Production of sets, costumes or other tangible property constructed or manufactured outside the Commonwealth, or from the Commonwealth after use in an Eligible Theater Production of sets, costumes or other tangible property constructed or manufactured in the Commonwealth and the transportation of the cast and crew to and from the Commonwealth; provided, that “Transportation Expenditures” shall include any portion performed in the Commonwealth of the packaging, crating and transporting of property and equipment used for special and visual effects, sound, lighting and staging, costumes, wardrobes, make-up and related accessories and materials and any other performance or production-related property and equipment.
Pursuant to M.G.L. c. 62 § 6(ff) and c. 63 § 38QQ, a Credit is allowed against the tax imposed under M.G.L. c. 62 or the excise imposed under M.G.L. c. 63, as applicable, to an Eligible Company that has obtained a Final Certificate from the Office. The Credit is equal to the sum of: (i) 35 per cent of the total in-state Payroll Costs; (ii) 25 per cent of the Production and Performance Expenditures; and (iii) 25 per cent of Transportation Expenditures; but shall not exceed the lesser of $7,000,000 or the amount specified in the Final Certificate.
The Credit may be claimed for tax years beginning on or after January 1, 2025. The Credit is transferable but is not refundable.
To obtain the Credit an applicant must apply to the Office and complete the process described in 400 CMR 10.03: Eligibility and Applications. The Office will review applications and issue an Initial Certificate to eligible applicants through the process explained in 400 CMR 10.04: Evaluation and Initial Certification. The Office will issue a Final Certificate confirming the amount of the Credit allowed to be claimed in accordance with 400 CMR 10.05: Final Certificate. An Eligible Company seeking to claim the Credit must do so on its tax return filed with the Commissioner. The Eligible Company must include on its return the certificate number listed on the Final Certificate. The Credit shall be allowed to an Eligible Company for the taxable year for which the Office issues the Company an Initial Certificate.
(a) A payment to a loan-out or an independent contractor will not qualify for the Credit unless:
(b) Upon completion of its tax year(s) during which the Eligible Theater Production took place, the loan-out doing business in Massachusetts must file a Massachusetts tax return and report its income and pay any accompanying tax liability.
An Eligible Company that has been issued a Credit for a taxable year may carry over and apply against the Eligible Company’s tax liability under M.G.L. c. 62 or M.G.L. c. 63 for not more than five succeeding taxable years the portion, as reduced from year to year, of the Credit that exceeds the tax for the taxable year.
An Eligible Company that has been issued a Final Certificate for a taxable year may apply to transfer, sell or assign the Credit, or any unused portion thereof, using MassTaxConnect. The transferor shall provide any information as may be required by the Commissioner to administer and carry out the transfer of the Credit. Potential transferors that have an outstanding liability of Massachusetts tax, interest, or penalties for any prior taxable year are not eligible to transfer, sell, or assign the Credit. Upon confirmation that the transferor is in possession of a valid Credit as described in the transfer application, the Commissioner will issue a certificate to the transferee stating the amount of the Credit transferred.
A person that receives a valid transfer of the Credit may, subject to the requirements and limitations of 830 CMR 63.38QQ.1, apply such Credit to offset up to 100 per cent of its tax liabilities imposed under M.G.L. c. 62 or M.G.L. c. 63. The transferee may apply the Credit against taxes imposed on the transferee for not more than five succeeding tax years from the date an Initial Certificate is first issued by the Office. A transferee may claim the Credit for any year in which it could have been claimed by the original Credit recipient, either by including the Credit on its original return or by filing an amended return, provided that the transferee’s statute of limitations is still open for filing an amended return for that tax year. The period of time for filing an amended tax return is set forth in M.G.L. c. 62C, § 37.
An Eligible Company must maintain records sufficiently accurate and complete to substantiate the validity of its claim for the Credit as set forth in 830 CMR 62C.25.1: Record Retention, including but not limited to the records listed in 400 CMR 10.08: Recordkeeping. The records must be maintained until the expiration of the statute of limitations for making additional assessments for the period for which the return was due. Generally, this timeframe is three years from: (i) the due date of the return, or (ii) the date the return is actually filed, whichever occurs later.
WORKING DRAFT FOR PUBLIC COMMENT - 3/23/26
