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?
Related: Harold Hill gulls the House