Michigan Game Maker Sues State

Nathaniel McClure (pictured), CEO of the game development Scientifically Proven Entertainment, has launched a suit against the Michigan Film Office and the Michigan Department of Treasury claiming that the state has denied his application for tax credits.

The Detroit Free Press reports that McClure is incensed over rules that “make it impossible for all but the smallest video game developers to use Michigan’s 42% video game tax credits.” McClure and his company, which employs 15 and also provides internships to Michigan State University students, are creating a game based on the Discovery Channel show Man vs. Wild.

Michigan Film Commissioner Janet Lockwood, however, informed McClure in a June 8th letter that Scientifically Proven was not eligible for the tax breaks because the company does not “own or control” the intellectual property rights to Man vs. Wild, Crave Entertainment does. Lockwood wrote, “An applicant with less than overall control over the project is not an ‘eligible production company’ eligible for the credit.”

McClure stated that Crave is on board to distribute and market the game upon completion, and added that he did not want to sue, but that state officials “have refused to meet with him.”

McClure’s attorney said that ownership of the IP rights was not required to receive the tax incentives, as the law states (per the paper), “… once companies receive approval for their tax-credit applications, any production expenses incurred in Michigan after that point, including the costs to acquire any intellectual-property rights, are eligible for the tax incentive.”

If things don’t work out, McClure is threatening to leave Michigan for another state.

On its website, Scientifically Proven notes that it is "utilizing the nation’s best entertainment tax incentive to create compelling competitive content." Ironically, the state film commission also touted the company as a success story in its annual report.

Ah, bureaucracy.

Picture of McClure from the Detroit News

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