The Iowa Attorney General’s chief of staff this week confirmed the state may file lawsuits to try to recover some of the $32 million in state tax credits that have already been awarded to film and TV productions.
Governor Culver suspended the tax credit program in September and fired the manager of the state film office. Earlier this month, officials confirmed a criminal investigation was underway. But Eric Tabor — chief of staff for the state’s attorney general — this past week said there’s a side of this investigation that will be played out in civil court as well.
“There’s really four ways that we think the law was just ignored and inappropriately applied,” Tabor told a legislative panel this week.
Tabor said the film office was “a complete mess” and while investigators are searching, it’s hard to find proper documentation for many of the film and TV tax credits.
“Of course, the way the program worked is after a movie was completed, the filmmakers would submit their qualified expenditures and get a tax credit,” Tabor said. “What we found in most cases was that there was extremely poor documentation of those expenditures, in some cases just a spreadsheet with no documentation to back up that spreadsheet.”
The second problem, according to Tabor, was that the only expenses that qualified for the state tax credits were payments to Iowa residents or Iowa-based businesses.
“We think in numerous cases the requirement for an Iowa-based business was skirted and was not followed at all,” Tabor said.
The state tax credits were not just available for the salaries paid to Iowans who worked on the films and for the expenses incurred in the state, though. The tax credits also were available for investors in the movies.
“The way the film office was supplying those credits, it ended up oftentimes in a 50 percent credit when we think that in many cases it should have been a whole lot less than 50 percent because they were not applying the investment tax credit provisions correctly,” Tabor said.
According to Tabor, it’s hard to see how some of the film and TV productions which did receive state tax credits had any economic impact in Iowa.