New Theater Tax Credit Offers Support for Massachusetts Arts Organizations

Designed to encourage local economic activity and nurture the state’s vibrant arts and culture ecosystem, the Commonwealth of Massachusetts has launched a new program that supports performing arts organizations while also bolstering Massachusetts’ reputation as a premier destination for theatrical production. Starting in July 2025, the Massachusetts Live Theater Tax Credit Pilot Program will run for five years. It offers eligible theater companies—both commercial and nonprofit—the chance to recover part of their production costs through state tax credits that can be transferred.

The program is managed by the Massachusetts Office of Travel and Tourism in partnership with the Massachusetts Office of Business Development. It provides tax credits for qualified expenses related to live theater productions staged in Massachusetts.

Eligible organizations include those that produce or present live musicals, dance, or theatrical performances in the state using a written script.

How the Credit Works

Qualified applicants may receive tax credits based on eligible in-state expenditures:

• 35 percent of payroll costs
• 25 percent of production and performance expenditures
• 25 percent of transportation expenditures

Credits are non-refundable but may be carried forward for up to five years. They are also transferable, which may be especially beneficial to nonprofit organizations that do not generate taxable income. The annual cap on available credits is $7 million.

Eligibility Requirements

To qualify, an organization must meet all of the following:

• Produce, co-produce, or present a live-stage musical, dance, or theatrical production using a written script
• Use a Massachusetts-based venue or Qualified Production Facility
• Schedule performances multiple times per week for at least one week
• Incur at least $100,000 in eligible Massachusetts production costs
• Begin performances on or after July 1, 2025

Productions may also qualify as Pre-Broadway or Pre-Off-Broadway if scheduled to open in New York City within 24 months of the Massachusetts run.

Funding Incentives and Application Details

The program provides a financial incentive for theater companies to expand programming, hire local talent, and raise the visibility of Massachusetts-based productions. Unused credits may be sold or transferred to taxable entities or individuals, which offers nonprofit organizations new revenue opportunities.

Applications for the 2025 cycle opened July 15 and are due by 5:00 p.m. on August 26, 2025. Interested organizations must apply through the Massachusetts Live Theater Tax Credit Program portal. A complete submission includes a detailed production budget and cost accounting report.

How We Help

AAFCPAs provides audit, tax, and consulting solutions to nonprofit arts and cultural organizations. Our team understands the complex funding structures, earned and contributed revenue streams, and regulatory obligations unique to this sector. Clients turn to us for support with internal controls related to admissions, ticketing, and auxiliary revenue sources such as museum stores and dining operations. We also advise on capital planning, IT and cybersecurity risk, endowment accounting, and governance training.

In addition, we help organizations navigate financial complexity through budgeting support, dimensional expense tracking, and financial analysis and projections. For organizations that depend on a mix of earned revenue and contributed income, we tailor financial strategies that reflect both mission and sustainability, aligning financial decision-making with artistic and organizational goals. Our services include financial reporting and grant compliance, equipping leadership with clear, actionable insights to meet funder expectations, engage stakeholders, and support sound strategic planning.

These insights were contributed by David Kelleher, CPA, CGMA, Partner and Lauren M. Duplin, Nonprofit Partner, Outsourced Accounting & Fractional CFO. Questions about how AAFCPAs can help your organization navigate the Massachusetts Live Theater Tax Credit program? Reach out to our authors directly or your AAFCPAs partner. AAFCPAs offers a wealth of resources to support those in the arts and culture space. Subscribe to get alerts and insights in your inbox.