More than $68 million in film tax credits were claimed in 2023, with insurance companies claiming most of them, according to the Fiscal Year 2024-2025 Annual Tax Report issued by the Connecticut Department of Revenue Services.
Of the $208.2 million in total tax credits claimed in 2023, the Film and Digital Media Production tax credit accounted for $61.1 million and the Film Infrastructure tax credit accounted for another $6.8 million. Those tax credits are used to incentivize film production in the state, largely by NBCUniversal and WWE in Stamford, and ESPN in Bristol, but Connecticut has also become one of the prime locations for filming Christmas movies.
While the state issues these film tax credits to film production companies, the credits are then sold by the film companies mostly to Connecticut’s insurance industry.
Of the $106.1 million in total tax credits claimed by insurance companies in 2023, film tax credits made up a little more than half – $57.7 million – and were the single largest source of tax credits claimed by the insurance industry. 2023’s figures were similar to those of 2022, when $61 million in film tax credits were claimed, and $49 million of them were claimed by insurance companies.
Established under Gov. Dannel Malloy’s administration as one of several business incentive structures created to grow jobs and increase state revenue during a decade of economic stagnation and budget deficits, Connecticut’s film tax credits have been under scrutiny for years following reports that they were a net loss for the state.
Earlier reports issued by Department of Economic and Community Development (DECD) officials up to 2019 indicated the credits were a net loss for the state and created few jobs. Connecticut ended the Digital Animation Tax credit previously issued to animation companies after the one digital film company based in Connecticut – Blue Sky Studios – closed in 2021.
In 2021, the DECD commissioned a film industry consultant to produce a study on the state’s film tax credit – called the Olsberg report — which, according to DECD’s reports, did not include an estimate of the fiscal impact of the tax credits to the state, but rather looked at a broader, overall economic picture and determined that the state’s film tax credits were an economic win for Connecticut. Since then, DECD has reported the film tax credits as a net positive for Connecticut in its annual reports.
A 2024 state audit found hundreds of millions in film tax credits had been awarded through a process that, according to auditors, cut some corners and improperly utilized application fees, much of which the DECD disputed. An earlier audit found the impact of the film tax credit had been overestimated by $600,000, and in 2024, the state policy organization Voices for Children issued their own study indicating the credit is a net loss for taxpayers.
According to DECD’s 2025 annual report, Connecticut issued $176.7 million in tax credits to companies purporting to spend $634 million on in-state expenditures.
Although the department was not yet able to estimate job numbers as required by a statutory change in 2023, the DECD claims the Film and Digital Media Production Tax Credit generated total sales of $841 million and generated $22.8 million in net revenue to the state. However, the Film Infrastructure Tax Credit amounted to a $17.8 million loss to the state. The DECD recommended that both programs continue because they operate “in tandem.”
“Since the Film Infrastructure Tax Credit operates in tandem with the Film and Digital Media Production Tax Credit, it is not possible to attribute long-term industry job creation to one program in isolation,” the 2025 report says. “As a result, the fiscal impacts presented here likely understate the broader economic benefits associated with maintaining a competitive film production ecosystem in Connecticut.”
Legislative proposals to eliminate the film tax credit have been met with stiff pushback from those in the industry. Recently, the television show Hell’s Kitchen began filming in Connecticut and taking advantage of the state’s film tax credits. However, the state will not release any details about the deal, claiming that release would violate trade secrets.
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