The trial of CPA/film tax credit broker Chad Witter is set to start today in Polk County district court. Mr. Witter is the last defendant scheduled for trial in the scandal arising out of Iowa’s disastrous film tax credit program.
If the papers bother to cover this trial (they pretty much sat out the recent trial of Dennis Brouse, which was probably the biggest trial of a film industry figure), we could learn a lot about the cottage industry of brokers and middlemen who are the real beneficiaries of Iowa’s economic development credits. The film credits were “transferable,” like a number of other Iowa tax credits. That allowed the itinerant filmmakers, who didn’t plan to stick around to incur any Iowa taxes of their own, to sell the credits at a discount for cash. Mr. Witter matched up filmmakers with interested taxpayers looking for a discount on their tax bill.
It is, of course, perfectly legal to buy and sell credits. Mr. Witter is charged with “Ongoing Criminal Conduct (Class B felony), two counts of Theft in the First Degree (Class C felony), and two counts of Fraudulent Practice in the First Degree (Class C felony),” according to the Attorney General’s website. His name came up in the Brouse trial and the State Auditor’s report, which said he approached potential film sponsors to get them to claim inflated values for their sponsorships.
Does anybody think that the film tax credit is the only tax credit ever abused in Iowa?
Link: Trial Information document
Related: Harold Hill gulls the House
Tags: Chad Witter, corporate welfare, Dennis Brouse, economic development, film credits, harold hill
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
I found this post by searching for information on the Witter trial, and the story I found was in the SF Chronicle – where are Iowa newspapers on this? No wonder the newspaper industry is failing. What I’m MORE interested to learn isn’t whether or not tax credits are abused (I presume everything is abused), but how high did it go? My understanding is that everything Mr. Witter did was signed off on at the Iowa Dept of Revenue. If the state government is signing off on it, doesn’t that make the State of Iowa complicit? Does that make Mr. Witter guilty of anything if a state program was approved by the state, if the information was laid out for the state to see? I’ll be interested to see how this plays out…if anyone other than the San Francisco paper covers it.