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According to the state’s Office of Fiscal Analysis, Connecticut’s tax credit program for film and television production costs the state’s bottom line. But while the public has an interest in understanding exactly how that loss occurs, an exemption for trade secrets in the state’s Freedom of Information Act (FOIA) makes that impossible.
In November 2024, Inside Investigator submitted a FOIA request to the Connecticut Department of Economic and Community Development (DECD) seeking eligibility documents, tax credit certificates, or any other documentation ITV America submitted to the agency as part of an application for the Digital Media and Motion Picture Tax Credit (production credit) for its production of Hell’s Kitchen, which recently shifted to filming in Connecticut.
What Inside Investigator got back almost a year later was mostly blacked-out documents. Any information related to the show’s budget or eligible expenditures, used to determine the amount of the production credit ITV America is eligible to receive, was redacted.
In the 36-page series operating budget for series 23 and 24 of Hell’s Kitchen that ITV America submitted as part of its film production credit application, all but two pages are blacked out entirely.
A separate budget cost qualifier document that listed costs the show incurred in Connecticut that were either qualified or unqualified for the tax credit contained only labels of information contained in a table.
All budgetary and expense information was redacted from ITV America’s film production credit application to DECD.
That information was withheld because FOIA’s definition of trade secrets exempt from disclosure includes film and television budget information. Connecticut is the only state in the nation to specifically include film and television budget information in the definition of a trade secret—and FOIA actually goes farther than the state’s trade secret law by naming that information as specifically protected.
As a result, there’s no way for the public to know how much production companies receive in film tax production credits for specific projects—information the public might want to know, as recent state reporting suggests those tax credits end up losing more than they bring in, and have repeated compliance issues that have been flagged by state auditors.
Tax Credits
The Connecticut Uniform Trade Secret Act (CUTSA) is based on the Uniform Trade Secrets Act (UTSA), model legislation originally published by the Uniform Law Commission in 1979 and since adopted by all states except New York and North Carolina. But what constitutes a trade secret in Connecticut actually has a broader definition.
UTSA covers formulas, patterns, compilations, programs, devices, methods, techniques, or processes that derive “actual or potential independent economic value” because they are generally unknown or not easily ascertainable by someone else who could obtain economic value from their use and that are the subject of “reasonable efforts” to maintain secrecy.
CUTSA covers all those things, plus drawings, cost data, and customer lists, which, while not contained in UTSA, are covered by other states’ trade secrets acts.
But here’s where it gets interesting: what is defined as a trade secret under CUTSA and what’s defined as a trade secret under the state’s Freedom of Information Act is different.
FOIA’s definition of a trade secret is broader and, unlike any other state in the country, includes film and television budgets.
CUTSA defines a trade secret as “information, including a formula, pattern, compilation, program, devise, method, technique, process, drawing, cost data or customer list” that derives independent economic value from not being generally known and if it is the subject of reasonable efforts to maintain its secrecy.
Under FOIA, trade secrets are defined as “information, including formulas, patterns, compilations, programs, devices, methods, techniques, processes, drawings, cost data, customer lists, film or television scripts or detailed production budgets.”
As in UTSA, the definition also has the caveat that they must derive independent economic value from “not being generally known” and that they must be the “the subject of efforts that are reasonable under the circumstances to maintain secrecy.”
CUTSA supersedes many conflicting laws, but it does not affect public agencies’ responsibilities to disclose information under FOIA.
That’s why FOIA’s specific inclusion of film and television production budgets in the definition of trade secrets is important.
Origins
It’s likely not a mistake that the expansion of that definition in FOIA comes from a 2007 law aimed at growing Connecticut’s film industry through expanded tax credits and a workforce training program.
The initial version of HB 6500 expanded the state’s film tax credit to cover sound recording expenses, introduced the tax credit for infrastructure projects, and ordered the Office of Workforce Competitiveness in the Department of Labor to create a workforce development program for the film industry.
The bill went through several committees, but a substitute version of it that was approved by the Finance, Revenue and Bonding Committee and sent to the legislature only included the workforce training program.
A floor amendment offered in the House of Representatives added the tax credit provisions back into the bill and also, for the first time, introduced the expansion of FOIA’s trade secret exemption.
There was no public debate on the expansion during the bill’s committee process and no mention of it when the bill was taken up by either chamber. It was the only section of the amendment not mentioned in the discussion prior to a vote. Though the amendment was offered by Democrats, final passage of the bill was bipartisan and nearly unanimous. Only two House members voted against the bill; the vote to adopt the bill was unanimous in the Senate.
The Freedom of Information Commission (FOIC) has no record of having offered any testimony on the subject.
Nor has its use since been challenged in any cases the commission has handled since that bill became law and went into effect, though other information covered by the trade secrets exemption has.
The House and Senate Democrat caucuses did not return a request for comment about why the FOIA expansion was included in the bill.
Numbers and Nagging Issues
The state has a number of separate tax credit programs for film and media spending, some of which were either created or expanded by HB 6500.
The digital animation production company tax credit, created by HB 6500, allows digital animation companies to apply for a tax credit of between 10 and 30 percent of qualified production expenses or costs. Studios must have a facility within the state and at least 200 full-time employees to qualify. For the first $100,000 to $300,000 of qualified expenses, companies can receive a 10 percent tax credit. For spending between $500,000 and $1 million, they can receive a 15 percent tax credit. For any spending over that amount, they can receive a 30 percent tax credit.
The digital media & motion picture tax credit works in the same way but applies to production companies that make any kind of “entertainment content,” including movies; television shows; ads; and video games, in the state. To qualify, companies must do at least half their principal photography in Connecticut and spend at least half of $1 million in postproduction costs in the state.
There’s also a tax credit for live theatrical pre- and post-Broadway productions, equal to 30 percent of eligible expenditures, including up to $250,000 of weekly payroll.
The film infrastructure tax credit, also created by HB 6500, allows any taxpayer who invests $3 million into a state-certified infrastructure project to claim a 20 percent credit.
Other tax exemptions are aimed at certain types of expenses, including sales tax for qualified expenses for production equipment and a waiver of the state’s hotel occupancy tax.
But the existence and effectiveness of those credits have drawn scrutiny over the years. Recent audits have also flagged numerous issues with how they’re being administered.
In a performance audit of DECD’s administration of the three media tax credits, covering fiscal years 2019 through 2022, Connecticut state auditors found a number of issues, including credits that were issued to companies that did not provide information or documents required by state statute.
Auditors found DECD did not have written policies for administering the credits, did not communicate with the Department of Revenue Services over information that “would have allowed it to reconcile credit vouchers issued and credits claimed by companies on their state tax returns,” did not maintain a master list of issued credit vouchers with data such as dollar amounts or employer identification numbers, and had not adopted regulations for the credit programs as required by state statute.
Additionally, auditors found inaccurate information and omissions on DECD’s webpage about the tax credits, as well as on application forms and in supporting documents. Auditors also found DECD officials were not consistently collecting all required application information.
Auditors also found DECD officials were not properly charging statutorily required fees that cover the administrative costs of analyzing applications for the tax credits.
The Office of Film, TV and Digital Media charged a fee anticipated to be worth one percent of the tax credit applicants received, with a minimum $200 fee and a maximum $5,000. But in several cases, applicants paid the maximum fee even though it was less than one percent of their anticipated credit.
A fiscal year 2024 audit also found DECD did not include a justification for recommending the film production infrastructure tax credit should continue, as state statute requires.
In 2024, according to the annual report DECD is statutorily required to submit to the governor’s office, DECD issued 42 credits worth roughly $171 million under the film, television & digital media tax credits and no credits for either the infrastructure or digital animation credits.
DECD’s estimated economic impacts of the tax credits for 2024 included 3,820 jobs, roughly $487.5 million in new gross domestic product, and $900 million in total sales.
Despite a requirement in the 2023 biennium budget that production companies who receive a tax credit report the number of full and part-time jobs they create to DECD, that data was not included in their 2024 report.
“We anticipate incorporating job creation data into future estimates.” DECD wrote.
DECD’s estimate of the tax credits’ fiscal impact, however, estimated a roughly $9.6 million loss to net state revenue, which they claimed was an “anomaly” compared to previous years.
“The reason is that film tax credit issues spiked in FY 2024 due to a few large claims that were filed together; as is usually the case, the productions took place a few years prior. Occasional spikes in claims issued can result in a negative fiscal impact when analyzed within a one-year timeframe.” DECD wrote.
DECD also included a five-year average of the estimated economic impact of the taxes, which found the credits created 3,190 new jobs and roughly $403 million in gross GDP. Across the five-year average, DECD estimated the credits had generated roughly $31 million in net state revenue.
The report recommended the film & digital media production tax credit and film production infrastructure tax credit programs continue but recommended the digital animation tax credit end “given lack of users and anticipated demand.” The state issued no new credits for either of the latter two programs in 2024.
In February 2022, Olsberg SPI released a study DECD had commissioned on the economic impact of the film tax credits, covering fiscal years 2012 through 2020.
During that time period, the study found production companies eligible to receive the digital media & motion picture tax credit and the digital animation production company tax credit had spent $3.1 billion in production expenditures and had invested $894.3 million.
Additionally, they found the digital media tax credit created 2,978 full-time equivalent jobs in fiscal year 2020.
Between fiscal years 2012 and 2020, the study found the film infrastructure tax credit “incentivized” $492.2 million and resulted in $98.4 million in investments.
In fiscal year 2020 alone, the study found the tax incentives had a $358.7 million gross value added impact, a measure of “economic value generated by an incentive” and the equivalent of gross domestic product on a national level. Across the three tax credit programs, it also found a $4.60 average return on investment. The digital media & motion picture tax credit had a $4.80 average return on investment.
The study’s analysis of the credits also found that returns on the investments were growing, with the average eligible expenditure per project for the digital media tax credit growing from $8.7 million in 2012 to $12 million in 2020. However, the study also found production expenditures, despite climbing over, time, peaked in 2019 before declining the next year. It also showed mixed use of the infrastructure incentive.
The study found the different incentives the state offers had been successful.
“Connecticut is a relatively unique jurisdiction in terms of its incentives offer and related impact. While some incentives focus only on projects, Connecticut’s combined project and infrastructure incentives offer has, over time, successfully developed an ecosystem of major Screen sector companies who have invested significantly in state. While the infrastructure involved may have been incentivized, and specific projects incentivized, there is nevertheless a significant amount of activity not covered by the incentives.” the study found.
But not all surveys of the programs have been so rosy.
A March 2024 study from Connecticut Voices for Children found the state had lost an average of $60 million in state revenue and a total of nearly $90 million between 2007 and 2023 because of the tax credits.
“The film industry in Connecticut states that it cannot operate without substantial tax credits that are equal to or greater than the tax credits provided in other states, yet, while the tax credits remain in place, Connecticut experiences a net loss in revenue. Additionally, Connecticut has a regressive tax system, meaning it unfairly burdens low- and middle-income families, and the film industry tax credits contribute to the problem because they consume the state’s limited financial resources but do not provide targeted support to the state’s low- and middle-income families.” the study found.
It also found that if the state eliminated the film tax credits, it would gain an estimated $105.8 million annually in revenue.
It’s not the only study that has found the state loses money as a result of the film tax credits. In 2024, a report from the legislature’s Office of Fiscal Analysis (OFA) found the state loses out on just over $10 billion in revenue annually as a result of tax credits and exemptions. About $55 million of that loss in fiscal years 2024 and 2025 was due to the film production credit, to the benefit of between 30 and 40 taxpayers.
OFA’s recent taxpayer expenditure reports also suggest the film tax credit’s burden on the state is growing. The 2024 report estimated a $55 million gain to state tax revenue if the film production credit were repealed, up from an estimated $20 million in a 2022 report and $25 million in a 2020 report.
Outside of its annual report, DECD does release some data about how much production companies are receiving in tax credits, but not on a per-production basis.
DECD currently reports tax credit activity data from 2007 to 2024, including the amount in tax credits a production company has received and total qualified expenditures for both the film & digital media production tax credit and the infrastructure tax credit.
Over that time period, Greenwich-based Blue Sky Studios, a visual effects and animation studio that did the effects for the original Tron and also produced the Ice Age films, has received the most in tax credits, nearly $267 million, and also spent the most on qualified expenditures, just over a billion dollars. The studio, however, went under in 2021.
Stamford Media Center Productions, the Stamford-based production studio of NBCUniversal that has produced many tabloid talk shows like The Jerry Springer Show and Maury, has received roughly $195 million in credits during that time period and spent over $600 million in qualified expenditures.
World Wrestling Entertainment and ESPN, in a number of formats, are also among the production companies that have received the most in tax credits. ESPN was the state’s sixth top lobbyist in 2023-2024. That year, it submitted testimony on only one bill, HB 5110, which would have eliminated the film production tax credit.
Then there’s ITV America, which has received the ninth-highest amount of tax credits between 2007 and 2024. The company bills itself as the largest producer of unscripted television content in the US. It’s not only the production company behind Hell’s Kitchen, but numerous other shows like Love Island, Pawn Stars, Queer Eye, and more.
Through 2024, ITV America has expended roughly $139 million in qualified expenditures and received roughly $40.5 million in production credits.
The company’s expansion into Connecticut has been significant and promoted by the highest levels of state government.
In 2018, then governor Dannell Malloy announced ITV America would be relocating “a significant portion of its business operations to Stamford.” With a move by Wheelhouse Entertainment, whose production arm has a partnership with ITV, to Stamford announced at the same time, the move was anticipated to create 450 jobs.
At the time, DECD gave a $6 million loan to ITV and a $3 million loan to Wheelhouse, which was partially forgivable based on the number of jobs created. “DECD funds will be used for the purchase of machinery and equipment and capital improvements. In addition, both companies are eligible for film/digital media production and infrastructure tax incentives.” Malloy’s press release stated.
ITV America was one of many production companies that lobbied against HB 5110, the 2024 bill to eliminate the production tax credit. With OFA data showing the production tax credit costs the state money, it was not the first bill in recent years to propose curtailing the program. This year, Gov. Ned Lamont proposed a five percent cut to the digital media tax credit in his annual budget.
But HB 5110 went further, proposing to eliminate the production credit entirely. The bill was a bipartisan proposal, with sponsors including House majority and minority leaders Reps. Jason Rojas and Vincent Candelora. It received a public hearing but was never voted on in committee.
Public testimony, largely coming from the film industry, was overwhelmingly in opposition.
Danielle Bibbo, ITV America’s chief business officer, submitted testimony opposing the bill.
That testimony stated that not only had the company moved in accordance with the announcement in 2017 due to “economic headwinds,” but that post-COVID-19, shifted the remainder of their East Coast production to Connecticut in 2022 based on the availability of the film tax credits.
“Over the years, ITV America has made significant capital infrastructure investments in Stamford, including building out a 36,000-square-foot state-of-the-art office/post-production facility, a 9,000-square-foot production technology hub and an 11-square-foot production studio where we shoot some of our hit shows. Additionally, we have brought 300+ high-paying creative industry and high-tech jobs to Connecticut, adding millions of dollars to the state’s tax revenue, while also attracting high-skilled young workers and their families to the state and otherwise contributing to the local economy in and around Stamford.” Bibbo wrote, adding the company has also sought to champion other local businesses” by working with vendors and service providers in the state.
Bibbo continued that if the tax credits were to expire, ITV America could move production to its Los Angeles office “where the media community is robust” or to another “nearby media-friendly state” like New Jersey.
“We have been committed to Connecticut based on your commitment to develop and grow the media industry in the state. If that commitment is broken by HB 5110, we may have no choice but to explore other options—our survival depends on it.” Bibbo wrote.
ITV America wasn’t the only recipient of film tax credits to submit testimony opposing the bill.
World Wrestling Entertainment, ESPN, and NBCUniversal, who are among the top five highest recipients of credits over time, all opposed the bill.
California has a much larger film and television production industry than Connecticut, or any other state in the nation, but its tax credit program has marked similarities to Connecticut’s.
Like Connecticut’s film production tax credit, California offers tax credits for qualified expenditures on projects that are filmed in the state and spend a significant portion of their budget in the state. California’s program does have different rules for how funding is awarded. Unlike Connecticut, California’s legislature allocates funding to its film tax program, meaning there’s a cap on how much the state spends on it each year. Also unlike Connecticut, California allocates certain percentages of that designated funding to different types of productions. For example, 35 percent of funding under the most recent updates to the program went to feature films.
California also puts a cap on the amount in credits a single project can receive. Applications are approved by the California Film Commission (CFC).
Under California’s state law, the CFC is also required to post information about production companies that receive tax credits on its website. Posted information includes: the fiscal year, the production title, the company name, the production type, the number of days spent filming in the state, the number of cast and crew hired, the amount a company spent in qualified expenditures, and the amount of credit they received.
For example, CBS Studios received a roughly $14.4 million credit based on $72.8 million in qualified expenditures for filming of Season 2 of its revival of Matlock. The production filmed on-location in the state for 128 days and hired 215 cast and 325 crew.
Back in Connecticut, all of that information is included in applications production companies submit to DECD as part of their film tax credit eligibility applications. But all of it is exempt from disclosure because Connecticut FOIA includes film budget information in the definition of a trade secret.
On its application for Hell’s Kitchen Seasons 23 and 24, ITV America was required to tell DECD their total budget, its estimated in-state expenditures, the breakdown of those expenditures into pre- and post-production, the number of principal photography days in Connecticut, and the date of its first expenditure in Connecticut.
DECD redacted every piece of that information in the document it turned over to Inside Investigator via FOIA.
DECD also provided a request that ITV America submitted, requesting that information in their application remain confidential.
“We respectfully request all information contained within the enclosed Connecticut Digital Media & Motion Picture Tax Credit eligibility application remain confidential. The Information is being provided to the Connecticut Office of Film, Television and Digital Media strictly for purposes of granting eligibility into the credit program. However, portions of the information contained within must remain confidential and should not be shared with any other party.” Nate Wakefield, a production finance executive at ITV America and their contact for Connecticut while the show was filming in Connecticut, wrote in a request sent to DECD.
DECD’s application for the production credit states that information submitted through it will become public records under FOIA unless it’s exempt. “Applicants may request that information contained in the application which are not exempt [from FOIA], be exempt from public disclosure. Such requests will be taken under consideration by DECD.” the application states.
In response to a request from Inside Investigator about how it considers those requests, director of the Office of Film, Television and Digital Media George Norfleet said “we search our files for responsive records. Once records have been compiled, we review for any statutorily exempt information and apply as applicable.”
While that request doesn’t override FOIA, the law’s trade secret exemption does give cover for much of the information companies like ITV America are requesting be kept confidential to be hidden from the public.
ITV America did not return a request for comment about why the company submitted that request or whether it believes the Connecticut public has the right to know how much production companies are receiving in tax credits.
The trade secret exemption in Connecticut’s FOIA does have a mitigating element. It exempts covered categories of information, including detailed production budgets, if elements of CUTSA, specifically if that information is valuable because it is not known and if maintaining its secrecy requires reasonable efforts, apply.
There are other exemptions in FOIA that have similar limiting factors. Connecticut’s preliminary drafts exemption, for instance, requires state agencies to perform a balancing test determining that there’s greater public interest in withholding information contained in preliminary drafts and notes than in disclosing them. The FOIC has ruled in several cases that this balancing test is an essential part of the exemption that agencies must perform in order to properly cite the exemption.
The trade secret exemption has a similar construction and the FOIC has ruled in several cases that agencies must prove that those elements of CUTSA cited in the trade secrets exemption to FOIA apply in order to properly claim it.
In a 2021 case decided after the wording of the exemption was changed, the FOIC found that the elements of CUTSA named in the trade secret exemption are factors that must be considered when evaluating the exemption.
The case involved a request for information about investments made by Connecticut Innovations, as well as other information about how they funded and managed investments. Connecticut Innovations later denied a part of the request seeking a spreadsheet that tracked gains and losses for individual investments because it considered information about individual investments a trade secret.
Connecticut Innovations testified that companies that seek investment from Connecticut Innovations would not do so if their financial information was expected to be shared publicly and that its employees sign a confidentiality agreement prohibiting the disclosure of information.
This factored into the FOIC finding that the information met both elements of CUTSA, that it was not generally known or easily obtainable through reasonable means, and the trade secrets exemption had been reasonably applied.
But none of the cases the FOIC has heard, which provide some guidance about the limits of how agencies can claim the trade secrets exemption and apply those elements of CUTSA, have specifically addressed production budgets.
The FOIC’s rulings help provide clear public guidelines about how agencies can and cannot claim exemptions. When there are no cases on a particular exemption, it’s harder to know what kind of FOIA responses might overstep the limits of the law’s exemptions and should be challenged.
In this case, it’s clear the information redacted fits squarely within FOIA’s definition of a trade secret because it is detailed budget production information. It’s less clear whether DECD has met its burden of showing CUTSA’s requirements apply here. That other states have made it publicly available would seem to weigh against that being the case.
DECD also cited another section of statute that states that certain categories of information submitted to it as part of applications for financial assistance, including tax returns and information concerning financial conditions, are considered part of information covered by the trade secret exemption.
Without access to that information, it’s impossible to know the amount in tax credits production companies receive for specific projects. While DECD and OFA report some data about the administration of the film tax credits, that data is limited in scope and presents either top-line figures or anonymized data.
Given the state’s own data showing the economic losses associated with the program and public criticism of the tax credits, it seems like more granular data that would help the public understand exactly how those losses occur would be within their right to know.
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