Moss Adams, one of the nation's largest accounting firms, has launched an online exchange for trading film and other tax credits.Called the Moss Adams Tax Credit Exchange, the marketplace allows film producers and other companies with tax credits to match up with buyers, converting credits they can’t use into cash they can reinvest in their business. Buyers can purchase credits online, helping them offset state taxes owed.
“We’re proud to bring the exchange to our clients and future members and expect it to transform the way tax credits are purchased and sold,” said Rob O’Neill, state and local tax partner at Moss Adams. “Through this new digital marketplace, exchange members will gain transparency and real-time access to buyers and sellers across the nation and reduce the time it takes to complete a tax credit transaction.”
The venture underscores the growing secondary market for film tax credits. About $1.5 billion in film-related tax breaks, rebates and grants were paid out or approved by nearly 40 states last year, according to Times research. That's up from $2 million a decade ago.Georgia, Louisiana and a dozen other states also allow tax credits to be sold to third parties, enabling filmmakers to cash in tax credits they may not otherwise be able to use, while giving buyers savings on their own tax bills.
A recent report in the Los Angeles Times highlighted the expanding trade in film tax credits and the effect on Southern California's signature industry. The credits are sold to wealthy individuals as well as major corporations, including Bank of America, Apple and Wal-Mart.
Seattle-based Moss Adams has been involved in transferable state tax credits since 2007, assisting with the transfer of $500 million in such credits, mainly fueled by the sale of transferable film tax credits. The exchange, which launched last week, also will handle the sale of energy, housing and other types of transferable credits.
Representatives of a business sign up to become a member and then share information about what credit they would like to sell. The credit is then listed on the Moss Adams Tax Credit Exchange and ready for buyers to find, bid on, and purchase. Fees vary based on type and amount of credit, though there is no charge to join the exchange, the company said.