Massachusetts may widen Americaâ??s tax break map

Massachusetts may widen Americaâ??s tax break map

By Rob Crossley

January 19th 2011 at 9:55AM

State aid proposed in wake of 38 Studiosâ?? move out

Game developers based in Massachusetts may soon qualify for tax breaks and other financial incentives offered by the US state.

Massachusetts’ proposals would, if enacted, bring the total number of US states offering game tax beaks to 18 – with the likes of Texas and Georgia offering the state aid.

The state inhabits studios such as MMO giant Turbine and music studios Seven45 and Harmonix.

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, still with a strong games industry, appears determined to not lose any more.

State Representative Vincent Pedone 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.

Details of the legislation are not finished, though early plans are to offer a range of tax break rates based on how many jobs and money a games studio can make in the state.

Other incentives would be offered to startups, it is said, or companies that relocate to Massachusetts.

As a failsafe, the legislators are pondering a ‘clawback’ stipulation – meaning that studios that fail to deliver will have to pay the state aid back.

It is in this stipulation that the state’s tax relief system appears to be offering money during or before a game’s project. Other game tax breaks policies around the world offer reimbursement after the conclusion of a project.

According to an Associated Press article, Pedone likened the potential of Massachusetts’ games industry to the biotechnology sector that has become central to its economy.

“Twenty-five or 30 years ago, no one in the Commonwealth knew what biotechnology was, and it has now become a critical part of our Massachusetts economy. We think the video game design industry has equal potential.”

The proposal has its opponents.

Last month, Massachusetts Lt. Gov. Timothy Murray is said to have stated: "I don't think [tax credits are] anything you're going to see in this budget.”

A final bill is set to be filed in the state house on January 21st, in advance of a vote.