Blue Sky Studios, the Disney-owned animation studio due to shut this month, received around $49.4 million more in Connecticut tax credits than it should have, according to state auditors.
In a report released on Wednesday, the auditors wrote that the Greenwich, Connecticut-based company took around $94.4M in state film production tax credits in 2017–2019 (state fiscal years). They argued it should instead have received state digital animation tax credits, which are capped at $15M per year for all companies combined. Under this program, Blue Sky would have been given no more than $45M across those three years.
Blue Sky did in fact receive the digital animation tax credit in the 2016 fiscal year, taking the full $15M. It was then switched to the film production credit, which allows companies that incur more than $1M in production expenses to claim back 30% of those expenses. In the fiscal year ending in June 2019, DECD distributed $157M to all companies under this program.