Econony gets boost with 20% live theatre tax credit

Illinois’ new Live Theater Production Tax Credit will put stage production on par with the benefits that film and TV received from the production tax credit, says Deb Clapp, executive director of the League of Chicago Theaters.

“This provides an opportunity to keep jobs in Chicago for theater artists, technicians, and support staff,” Clapp says.  “It’s a great thing for Chicago theater.”

Originally introduced as a standalone bill by Sen. Dan Kotowski in January 2011, Gov. Pat Quinn signed the Theater Tax Credit into law Dec. 16 as part of Illinois Senate Bill 397, which most famously offered tax breaks to keep Sears and the Chicago Mercantile Exchange in Illinois.

Beginning in July, Illinois will offer the 20% credit on a minimum of $100,000 in in-state expenditures, up to a maximum credit of $2 million per project per year. 

It will be administered by the Department of Commerce and Economic Opportunity, which, as the parent agency of the Illinois Film Office, also administers the 30% Illinois Film Tax Credit.

Deb Clapp, League of Chicago Theatres directorThe Theater Tax Credit is limited to for-profit theaters with at least 1,200 seats.  Only a few downtown venues are eligible, including Broadway in Chicago’s Bank of America Theatre, Ford Center for the Performing Arts/Oriental Theatre, Cadillac Palace Theatre, and Broadway Playhouse, as well as the Arie Crown Theater.

Why the 1,200 seat minimum?  Clapp wasn’t sure, but she pointed out that venues with fewer than 750 seats are exempt from the 1% Cook County amusement tax. “Throughout Illinois there are many more that do have 1,200 or more seats,” Clapp says.

While state film incentives are ubiquitous, theater incentives are less common, though Louisiana does offer a 25% live theater credit.

Extra year run for hit could add $500 million to economy

Broadway in Chicago president Lou Raizin said in a statement after SB 397 was passed, “The addition of one year to a long-run show could generate an economic output to the city and state of over $500 million, attracting more than 800,000 people with more than 42% coming from out of the market, staying in area hotels and eating at local restaurants.”

The Daily Herald reported on Dec. 28 that Raizin said the bill would generate $480 million in economic activity and create 2,000 jobs. 

Raizin also told Time Out Chicago that had this bill been in place, Wicked would have stayed in town an additional year past its three and a half year run, generating $600-800 million in net spending.

Raizin declined an interview request for this article.  Bill co-sponsor State Sen. Toi Hutchinson did not respond to Email and phone messages.

“The economic impact could happen over time,” Clapp says.  “I don’t think it would happen in the first year.  I know actors who were in Wicked who said ‘I can put my kids through college on what I earned from that show.’  You couldn’t get a table at Petterino’s any night of the week.  A lot of people working Downtown had a lot more business.”

“There’s so much advantage to having a long-run production,” Clapp says.  “The number of local people employed by a sit-down production is much higher” than for a touring show.  “There’s a big difference in the economic impact.”