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Lights, camera, tax credits in Illinois · Illinois Valley - Shaw Local

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Lights Camera Tax Credits in Illinois. Written by Beth Hunsdorfer and Casey
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Toner Illinois Answers Project. This article is being read by an automated
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voice brought to you by Everlett. This story is a collaboration between
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Capital News Illinois and Illinois Answers Project. When developer Christopher Brakewell came
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to Wood River last year, He
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was selling a glittery dream to a gritty, blue-collar southwestern Illinois town
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in search of a renaissance, a Hollywood style studio that would thrive
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in the shadows of aging refineries. He envisions building a 95 million
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development that would provide sound stages to film production companies lured to
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the state by new legislation that allows them 45 of their expenditures
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or more back in income tax credits. This puts Illinois at the
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top of The
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heap in the country, with New York, California, and Georgia in film
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tax credits offerings, according to Industry magazine Rapbook, which could mean billions
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of dollars of spending in the state. Industry advocates say The 105-acre
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site is within view of a Mississippi River levee, formerly home to
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an ammunition manufacturer's headquarters and a recycling center. After clearing trees from
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the site, pouring foundations and installing prefabricated studios, he's looking for a
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site to erect large white letters, reminiscent of the Hollywood sign in
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California, spelling out the name of his studio. Hollywood River. I was
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already looking at Illinois, and then the talk about the enhancements came.
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I mean it certainly is the reason that we're investing here, Brakewell
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said, of the tax credits. Between the Governor's vision of the film
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tax incentives, and the state legislature actually moving forward with it too,
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because you need both to get it done, as he said. The
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latest enhancements are amazing, and it really pushed, especially for downstate. Governor
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J.B. Pritzker signed legislation last year providing enhanced incentives, expanding the base
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credits from 30 to 35 on resident labor and vendor spending. The
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governors made the move despite mounting evidence from academics who say these
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types of credits amount to corporate handouts that shift potentially hundreds of
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millions of dollars of fiscal burden to taxpayers while doing little to
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stimulate local economies. These incentives are a way for governors to curry
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favor with a small group of people in
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the industry who happen to live in their state while sending the
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tab to a much larger group of taxpayers. University of Southern California.
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Public policy Professor Michael Tom, who has studied tax credits, wrote in
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an email. Your readers can decide if that's good policy or just
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politics as usual. But people who work in the industry say the
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expanded incentives are needed to lure and keep film jobs in Illinois
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and stay competitive with global tax havens as well as other states
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that have increased their own film incentives. It's mostly a difference between
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making a decent living and thinking I might have to move to
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a different location because there's not enough work, said Philip Cock, a
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Chicago filmmaker whose production company used the tax credits to film music
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videos for the Smashing Pumpkins and Chance the Rapper. It's night and
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day. Illinois was an early adopter of film income tax credits. Under
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a law signed by Governor Rod Blagochevich In 2003, the state began
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issuing them to qualifying productions as a proportion of their overall expenses.
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These credits, which can sometimes exceed millions of dollars per production, are
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typically then sold to insiders or wealthy corporations with no ties to
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the film industry who well use them to pay less in Illinois
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state income taxes. In the past six years alone, the state has
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issued nearly 1 billion in income tax
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credits under the program, shifting the tax burden onto the shoulders of
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state taxpayers to make up the difference. Recent tax credit buyers or
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recipients include large corporations such as Kraft Foods and U.S. Bank as
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well as prominent individuals, including J.B. Pritzker's cousin, Jennifer Pritzker, Smashing Pumpkins
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founder Billy Corgan and Peng Zhao, the CEO of the multi-billion dollar
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private equity firm Citadel Securities, once based in Illinois. The largest tax
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credits were issued to production companies that filmed seasons of Chicago Fire,
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Chicago PD, Chicago Med on NBC, and Dark Matter on Apple TV.
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Film expenditures in the state reached a record breaking high of 703
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million last year before the enhanced incentives, designed to stimulate the film
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industry's growth downstate and outside Chicago were signed into law. There's
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some really great opportunities to build some of this industry in places
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that aren't named Chicago or Cook County, Pritzker said at a news
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conference earlier this year at the Sciencepace Studios in Chicago, where he
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announced the expanded incentives. The industry itself wanted to have more backdrops
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because not every scene is going to be a city street with
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a lot of people on it, or a lot of homes next
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to each other. While the credits are typically touted as boosting the
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TV and movie industry statewide, data shows that the tax incentive program
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also supports smaller budget projects, such as a 115,000 commercial filmed four
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years ago for Illinois House Democrats. Unlike other states that offer tax
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credits only for film, production, commercials, and music videos with as little
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as fifty thousand dollars, can qualify for Illinois program. Since 2005,
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Illinois's film tax credits have subsidized almost 3,000 small-budget commercials, such as
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advertisements for McDonald's, Illinois Lotto, and Kraft Macaroni and Cheese, almost three
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times The number of television and movie projects combined. Illinois Department of
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Commerce and Economic Opportunity spokesperson Eliza Gleasers said that the small budget
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commercials are a major economic driver. State officials pointed to one example:
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a Walgreens commercial filmed earlier this year in Chicago for 1.6 million.
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But the larger set of incentives aimed at luring big budget productions
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such as T V series and movies, such as Dick Wolfe's Law
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and Order, to Illinois, are key to Brakewell's business model. The future
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of storytelling Flanked by union leaders, lawmakers, and even Chicago fire actor
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Joe Mignoso, Pritzker stood in the backdrop of Scenespace Studios in March
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to celebrate Illinois film industry and one of the hallmarks of his
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economic agenda. The expanded film tax credits. Their expansion would ensure that
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the future of film, the future of storytelling, is going to be
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shaped in Illinois Pritzker said. State records show that production companies that
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received the tax credits employed 153,000 people who worked as crew members
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and talent during the past two decades. In 2022, Illinois added incentives
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for Non-resident labor. Thirteen nonresident crew members and four-six non-resident actors are
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eligible for incentives. The number of actors depends on the size of
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the film's budget. Salary caps and limiting the number of non-residents eligible
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for credits creates an environment to lure small independent productions that would
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hire Illinois workers and businesses, state officials said. But two extensive studies
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of tax credits in the past decade have reached the same conclusion
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the programs do little to stimulate the economy or create permanent jobs.
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A 2016 study co-authored by Penn states University economics professor Mark Owens
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estimated that Illinois spent about 19,652 per job and received about 0.22
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in state revenue for every 1 of tax credit spent. The other
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side of this is almost every state is offering some kind of
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credit right now, and so if you don't offer it, you could
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be missing out on films that could be produced, Owen said. Whether
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it pays for itself, I have my doubts. Tom, the USC public
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policy professor, wrote a 2016 study that analyzed 40 states tax incentives
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designed to lure film productions out of California and New York from
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1998 through 2013. It found that while the transferable tax credits had
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a small effect on movie production employment, there was no effect on
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wages or movie industry concentration. The general rule of thumb is that
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for every one dollar taxpayers give Hollywood, taxpayers get back ten to
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twenty cents, he said. Who would invest their money in something with
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that kind of a return on investment? But a study commissioned by
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the Illinois Production Alliance found that Illinois tax credits resulted in 6.81
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overall return on investment for every dollar spent with 3.70 coming directly
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from productions filmed in Illinois. State officials said this resulted in more
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than 4.5L billion dollars in economic activity from fiscal year 2017 to
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2024, with 94 attributed to the enhanced incentives. The film
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tax credit has succeeded in creating new jobs, attracting more production, and
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bolstering an important industry in Illinois's economy, while helping launch studios such
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as Hollywood River Studios in the Metro East, a DCEO spokesman said
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Separate from the economic impact, Tom said film tax credits can help
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forge relationships between ambitious politicians and wealthy Studios heads. Pritzker, who
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is courting a national audience in advance of the twenty twenty eight
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president race, has ties to California and traveled across the country ahead
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of the Democratic National Convention in Chicago in twenty twenty four to
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hobnob with entertainment moguls on behalf of the Democratic Party. Pritzker
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also held meetings with Carol Turner, Disney's head of television production, and
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Mike Posey, Netflix's vice president of production for the US and Canada,
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while the
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tax credits legislation was on his desk in December 2025, awaiting his
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signature, according to copies of his schedule obtained by Illinois Answers and
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CNI. Weeks later, Pritzker appeared at Flyover Studios in Rantoul with Jennifer
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Shelby, president of Flyover. The studio formed in late 2024 in the
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decommissioned 6-acre Channute U.S. Air Force Base. Artists such as Wiz Khalifa,
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Brian Cranston, and John Goodman have already filmed projects on the site.
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Shelby said Flyover has benefited from a fifteen percent bonus for hiring
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workers from high poverty or high unemployment areas, plus a five percent
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bonus for hitting Illinois residents, working outside the Chicago metro area, and
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incentive to film in places like Rantoul and Wood River. Fees charged
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when the tax credits are issued also fund the state's film and
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TV workforce training program, which helps supply entry-level workers from places like
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Rantoul to film productions statewide. We would very much like to attract
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more people and do more training in some of the small towns
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that would fall under that and give them an opportunity to work
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and give the filmmakers additional tax credit that the can earn back,
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Shelby said. So there are a lot of different spokes to the
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wheel to make this and work successfully and we are trying to
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make sure we're hitting all of The Benefits for the wealthy and
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connected. Under Illinois's film credit expansion that Pritzker signed, the percentage of
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the income tax credits increased from 30 of qualifying expenditures to 35
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with added sweeteners that stack for green productions, productions that move into
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Illinois from other states, in addition to the extra credits
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for downstate and low-income locations. We're trying to encourage those folks to
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do business in other parts of Illinois so that we can employ
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people in other parts of Illinois, Pritzker said. The Illinois film credits,
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which will not expire until the end of 2038, have historically been
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uncapped, meaning that a production company could finance a movie for hundreds
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of millions of dollars that would be eligible for 35 or more
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of its expenditures in tax credits. The change in state law promises
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a financial windfall for film productions, increased sales for tax credit resellers,
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and greatly reduced tax liabilities for the credit recipients and buyers. The
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way it works is that production companies apply for income tax credits
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based on a proportion of their expenses after filming ends. Usually, an
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accountant tallies the qualifying expenses and submits them to the Illinois film
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Office, which reviews the expenditures for approval and issues the tax credits,
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Production companies can take the credits for themselves or sell the to
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a broker who takes a commission when they sell them to buyers
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for 90 of face value, according to interviews with brokers. The buyers
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can the resell the tax credit or apply them to their their
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income tax Billy Records reviewed by Illinois Answers Project and Capital News
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Illinois show the wealthy and connected benefiting from the state's tax credits.
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For example, William Pritzker, J.B. Pritzker's cousin, was an executive producer on
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the 2025.
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Feature film Pools, a coming-of-age drama starring Odessa Azion. The productions, company,
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Pools Film, had a production budget of about 950,000. The state of
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Illinois in turn issued the company an income tax credit of 274,000,
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which was transferred to William's parent, Jennifer Pritzker. They did not respond
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to messages seeking comment. The governor in his office have no knowledge
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of or role in individual film tax
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credits transfers, according to a Pritzker spokesman. In a statement, DCEO said
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it does not determine who buys or receives the tax credits. But
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only provides support overseeing the transfers. Peng Zhao, CEO of the hedge
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fund Citadel Securities, which has since moved from Illinois to Florida, bought
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13.7 million worth of income tax credits from 2021 to 2025 state
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record show. And after Production the Smashing Pumpkins video Beagled, Cock Marshall
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Productions transferred they 15,553 income tax credit to bandleader. And
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longtime Highland Park resident Billy Corgan. On the higher end of the
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spectrum, the tenth season of Chicago Fire, which was shot in 2021,
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had 104 million in Illinois expenses, and the production company received a
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30 million tax credit in 2025. The credits also can
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be used as a financing tool for small productions, which can borrow
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against the anticipated tax credit to finance their projects. Records show that
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about 250 million in film tax credits were issued to almost 3,000
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small commercial projects in the two decades. That's more than the 170
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million issued for 301 movies, but less than the 1.2 billion issued
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for almost 767 TV projects. Additionally, it creates a market for intermediaries
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to sell the tax credits from approved productions to purchasers for a
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1-2 commission. One of the state's most prolific brokers, credits, and incentives
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corp based in Puerto Rico has sold more than 125 million a
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million in Illinois tax credits. Its co-founder, Kenneth Blaine, said the business
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is relationship-based. When you think about it at the corporate level, they
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are not going to buy tax credits from anybody off the street,
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said Blaine, who sits on the board of the Illinois Production Alliance,
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a film production advocacy group. You want to make sure they are
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a company that has a proven track record and reputation. Jake Prine,
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a Chicago-based tax consultant and budget strategist, said the process of submitting
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receipts for film tax credits requires a deep knowledge of the law
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and accounting, a niche specialty. Handling these types of transactions is very
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lucrative for the few people who do it, Prime said. And it
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can be beneficial for The buyers as well, who are able to
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reduce their state income tax liability. The largest buyer in recent years
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is US Bank, which has bought 70 million in income tax credits
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from 2021 to 2025, state records show. That means that the bank,
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which in 2024 had a net income of 7.6 billion and more
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than 160 locations in Chicago alone, could use those credits to pay
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less in taxes that support schools, pensions, and other state services, shifting
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the burden to other regular Illinois residents and businesses. A US bank
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spokesperson said that by purchasing these credits, the company funds films and
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carries out the Illinois film tax credits mission by creating jobs and
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generating economic activity in Illinois It's a wrap Even though the new
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incentives went into effect earlier this year, the state is already seeing
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investment in film production. Startup Studios have popped up in Rock Island
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and Rantool and Breakwell Studio in Wood River is scheduled to be
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up and running in The
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fall. Brakewell isn't a stranger to the entertainment business. As a former
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executive at JP Morgan Chase, he was the banker for former National
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Football League's Rams owner, Georgia Frontier. After helping Frontier's son, Dale Chip
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Rosenblum, finance the movie Alice Upside Down, filmed in St. Louis with
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Penny Marshall and Luke Perry, Brakewell went on to run 31st Street
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Studios in Pittsburgh. At its peak, the studio was used in the
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filming of such blockbuster films as Avatar and the Dark Knight Rises
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and the Netflix series Mind Hunter. But Brakewell's company that ran the
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studio, Gateway Entertainment Studios, fell on hard times and declared bankruptcy in
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2016, listing twelve point one million dollars in assets and nine point
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nine million dollars in liabilities, court records show. The studio, which fell
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into disrepair due to alleged water leaks, owed 147,000 to the city
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of Pittsburgh and 9,400 to Allegheny County, in addition to hundreds
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of thousands of dollars owed to contractors, law firms, and other vendors.
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Those debts were satisfied before Breakwell sold the studio for 14 million
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in 2017. In an interview at his offices in Granite City, Brakewell
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blamed Pennsylvania politics and the legislature's lack of continuing support for the
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studio sale. Pennsylvania made available 60 million in annual film tax credits
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before and during the studio's bankruptcy. Brakewell said his Illinois venture will
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be different. He Will
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operate solely as a vendor, running the studio, supplying subcontractors, transportation and
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logistical support to film producers and potentially offering financing. In addition, he
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said he plans to build an e gaming stadium, a hotel and
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recording studios. He's optimistic this project will succeed. The key for us
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downstate is to just get on their radar and provide them knowing
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that we're right across from Saint Louis. There's so many things to
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shoot, and even southern Illinois is just beautiful. You can do anything
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over there, Brakewell said. The city of Wood River, where almost 14
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of the 10,000 populations lives in poverty, is taking the risk. The
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city has an annual budget of 28 million and is desperate for
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an economic driver to replace the blue-collar jobs lost over decades. To
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lure Brakewell, the city sold the property to him for one million
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dollars, and City Manager Steve Pallan put together a tax increment financing
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package to reimburse 90 of the project development costs. Those reimbursements are
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capped at 50 million and will sunset in 2042 when the district
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expires. The city council passed the deal unanimously, but board member Bill
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Detmers called the agreement not very well put together and argued for
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clawbacks, in case the project fails. There's not a definitive provision in
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there on what has to be done, in order for us to
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buy the property back, said Detmers, who nevertheless voted to approve the
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deal. While the development is still under construction, Breakwell said one studio
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has already expressed interest in filming a series at Hollywood River Studios
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with an A-list actor, a project that could start as early as
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this fall. Will Wood River soon see George Clooney or Emma Stone
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at the local coffeehouse roasters or the downtown restaurant burger bar? Polin
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believes it's possible. This is going to be a boon for our
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town, Palin said. Capital News Illinois is a nonprofit, non-partisan news service
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that distributes state government coverage to hundreds of news outlets statewide. It
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is funded primarily by the Illinois Press Foundation and the Robert R.
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McCormick Foundation.