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Michigan Puts Cap On Game Dev Tax Breaks

Michigan Puts Cap On Game Dev Tax Breaks

July 12, 2011 | By Frank Cifaldi

Michigan governor Rick Snyder signed legislation Tuesday severely limiting the amount of tax incentives available to game developers and entertainment companies operating in the state.

Under the new terms signed today, the previously-unlimited tax rebates covering up to 42 percent of a film, TV or game's tax expenditures have now been capped at $25 million a year across all projects.

Additionally, the new law allows the incentives to be negotiated, meaning they can now be lower than the previous 42 percent.

The new law adds further complication to the incentives that Michigan game developers tell us are not meeting the needs of the game industry.

"The compliance requirements were just way beyond what we were willing to do based on the amount of money we would get," Stardock CEO Brad Wardell recently told Gamasutra. "The [Michigan Film Office] did a great job to make sure no one is bilking the government."

The new budget was proposed by Snyder earlier this year.

The tax credit was introduced in 2008, and over 130 entertainment projects have received over $648 million in tax savings thus far. Unfortunately, the game industry hasn't seen much of that money, as detailed in our recent feature story, The Realities of Michigan's Game Tax Breaks.

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