Massachusetts game development studios could soon receive a tax break of 25 per cent on production costs, new data suggests.
In a detailed account of a bill being looked at by state officials, it is said that studios which stamp their games with a ‘Made in Massachusetts’ logo would receive even bigger tax breaks.
The bill also proposes that game studio “labour costs”, particularly payroll costs, should be cut by 35 per cent.
According to data provided to Develop by a tax specialist firm, any developer making less $1,000,000 is eligible for the 35 per cent payroll relief.
That saving won’t be transferred to individuals, but to studio accounts. It would mean that, if the bill were passed, Massachusetts studios can attract better talent with bigger wage promises.
The northeastern US State inhabits studios such as BioShock creators Irrational Games, as well as MMO giant Turbine and music studio Harmonix.
In a new Develop feature, two execs from specialty tax services provider Alliantgroup detail the benefits of the bill.
Alliantgroup managing director Dean Zerbe and senior associate Angelique Garcia said the tax break would turn Massachusetts into a “safe haven” for games studios.
Both said that “most other non-payroll costs” related to game production would be eligible for the tax break.
“These items range from computer hardware and software used in development, to expenses incurred in acquiring music for a soundtrack,” the duo said.
“Additionally, many employer-provided fringe benefits, such as parking or other transportation subsidies, may also be captured.
Rent costs for development facilities may also be captured, the team say.
Elsewhere in the feature, the two say that “workforce credit” will be available to studios that pass certain job creation benchmarks.
TAX BREAK CALL
The bill for game development tax breaks was put forward in April this year.
No decision has been made yet but, if enacted, Massachusetts would join a growing number of US states which employ game tax breaks.
Alabama, Arkansas, Connecticut, Florida, Georgia, Hawaii, Kentucky, Maine, New Mexico, North Carolina, Ohio, Rhode Island, Texas, Virginia and Wisconsin all have a tax break policy, Alliantgroup said.
Massachusetts already has a tax break policy for film production.
Recently, in a high-profile switch, 38 Studios last year moved out of the state to Rhode Island, in return for a huge loan sum at its new home.
Massachusetts state representative Vincent Pedone recently said the plan was to expand the state’s $2 billion game industry to $20 billion in five years.
Pedone didn’t estimate how much the proposals would cost.