A group of Chicago independent filmmakers and production companies say the Illinois Film Office is favoring large Hollywood production studios and that the agency’s actions are causing economic hardship that has some of them considering leaving Illinois.
Gov. JB Pritzker announced in April that film production companies spent $653 million in Illinois is 2024 — the second-highest total in state history. The record is $700 million, set in 2022.
Prairie State Production Alliance — a group of 61 independent filmmakers and production companies — sent a letter to Pritzker last month in which it said the Film Production Tax Credit program is unfairly forcing indie filmmakers to go through bureaucratic obstacles and interpret rules that aren’t clear.
They say the roadblocks have pushed some to decrease their film budgets, leading to fewer jobs, that others have canceled projects, and some are considering moving productions to other states and that these are all issues the tax-credit program was supposed to guard against.
“We had smooth sailing, but then, on a dime, everything changed” in early 2024, Full Spectrum Features co-founder and co-executive director Eugene Sun Park said. “We’re not NBC or Universal. We don’t have deep pockets. So we depend heavily on the tax-credit financing both to fund our movies and our general operations. It’s literally a fight for survival at this point.”
The Film Production Tax Credit, passed in 2008, gives producers a 30% credit on qualified expenditures, including post-production. It also gives producers an additional 15% tax credit on the salaries of people who live in economically disadvantaged areas. There’s no cap on film and television tax credits.
Illinois has dispersed more than $700 million in tax credits through the program, according to the film office.
Chicago-based Full Spectrum Features is a nonprofit that focuses on producing and supporting the work of women, BIPOC, disabled and LGBTQIA+ filmmakers. Its film budgets are usually about $1 million with crews of about 100 people, according to Sun Park.
The nonprofit has taken advantage of the program for more than 15 years but said the seven-member film office has inundated its members with “unreasonable” requests after submitting tax-credit applications and not explained why.
For many of Chicago’s independent filmmakers, who lack the big budgets of Hollywood studios or major TV networks, the tax credit is something they rely on.
In its letter to Pritzker, Prairie State asked the governor for transparent rules and to apply them equally.
Pritzker’s office said that, under his administration, “Film expenditures in Illinois have skyrocketed to record levels. Small productions represent valued partners in Illinois’ diverse film landscape and play a significant role in driving economic development in the state.”
Peter Hawley, director of the Illinois Film Office, declined to comment.
In a written statement, his agency said: “Every production is held to the same standard. IFO evaluates all project credit applications equally, regardless of their size or origin, on a first-come, first-serve basis. IFO is taking steps to streamline the claim process and, at the same time, enhance program transparency. We cannot both streamline the claims process and seek less information from credit applicants; requesting details to support a claim is critical to ensure the program continues to operate with a high degree of integrity and protects the taxpayers’ investment in Illinois film.”
John Bosher, a partner in Throughline Films, said he noticed a shift early last year in how the state office handles things and that this has led to an “adversarial effect with local producers.”
“I’m not sure why that is, but it’s definitely rattled our faith in the program and the state as a consistent locale,” Bosher said.
He said his company had to cut down on the number of projects it makes and slash its film budgets because, instead of waiting 90 days for a tax-credit approval, it’s taking 22 months. Throughline and its subsidiary Very Merry Entertainment typically have film budgets between $1 million and $2 million and crews of about 150, according to Bosher.
“Our investors are wary over whether or not the estimated tax-credit value is going to materialize or if the IFO is going to arbitrarily slash its value for reasons that they refuse to explain to us,” Bosher said. “Each of our last three projects has budgets that are less than 50% of its predecessor. That means we’re hiring less people for less days, we’re paying lower wages, and we’re generating less economic activity and tax revenue for the state.”
When confronted, Bosher said, the IFO has been pointing to a phrase in the legislation that says to qualify, expenses must be “reasonable in the circumstances,” according to the bill.
“That’s open to interpretation,” Bosher said. “There’s a level of subjectivity in this taxpayer-funded public program that should not exist.”
He said he has been talking with officials from other states and is considering moving productions out of Illinois.
Christine Fitch, a certified public accountant with Film Tax Credits, a company that files tax-credit applications for commercial, TV, studio and independent films, said the state film agency has been sending more inquiries regarding independent films.
“The questions we are getting back from the film office have substantially changed,” Fitch said. “They are significant questions that take a significant amount of time. Unfortunately, I see that more on the independent film side than on either the commercial or studio side.”
Doreena Towner, founder and chief operations partner of Chicago-based Emerging Business Solutions, has filed dozens of tax-credit applications for filmmakers in Illinois. Towner said she hasn’t noticed any difference in what the state is asking independent filmmakers compared with what’s being asked of Hollywood firms but that the rules could be more clear.
“The Illinois film credit is one of the best in the country,” she said. “Are there efficiencies that can be implemented? Of course. As an independent CPA, that’s what we’re advocating for, which will in effect do what all of the studios and the independent filmmakers want, get their credits back faster and have clear, concise rules that could be followed.”
