In 2023, Elton John’s production company, J. Bondi, sold a $1.565 million tax credit it received for holding its Farewell Yellow Brick Road rehearsals at Rock Lititz.
A subsidiary of Erie Insurance paid $1,443,712 for Elton John’s tax credit to offset its Pennsylvania Insurance Premium tax, in effect netting $121,288, according to state records obtained by LNP | LancasterOnline.
And GSL Government Consulting LLC picked up a 10% commission or $144,713 from Elton John’s proceeds for brokering the deal.
Insurance companies and banks are the biggest buyers of the Entertainment Economic Enhancement Program tax credit, buying more than $28 million in tax credits since 2019, according to an LNP | LancasterOnline analysis. That amount includes:
— $6.495 million in credits that Lancaster-based Fulton Bank purchased to offset its state Bank & Trust Company Shares Tax.
— $11.6 million that Erie Insurance purchased to offset its insurance premium tax
— $3.548 million Harrisburg-headquartered Ollie's Bargain Outlet bought to offset its net income tax.
The sale of the Rock Lititz tax credits is legal and it's the only way recipients who don’t owe state taxes can see some benefit from them.
The tax credits can be purchased to offset buyers’ state personal income tax, Bank & Trust tax, Insurance Premium tax or corporate net income tax.
But the state Independent Fiscal Office has pointed out that a sale of a tax credit is a loss in state revenue, affecting the tax credit’s usefulness as an economic development incentive. Whether the EEEP tax credit does enough to incentivize economic development has been questioned by conservative and progressive think tanks.
READ: Tax credits at Rock Lititz went to 33 performers including Taylor Swift
Who benefits
Since the tax credit was enacted, about 80% (or 30 out of 38) of the awards, have been sold to state businesses and residents, including two founders of Rock Lititz and a few wealthy Lancaster County businesspeople.
To offset his personal income tax, Rock Lititz co-founder Adam Davis, CEO of Tait, purchased $150,000 of Elton John’s tax credit, according to state records. Davis paid $139,500 for the credits and Elton John paid a 10% broker commission in 2019. Attempts to reach Davis were not successful. A spokesperson said Davis was traveling and was unable to comment.
Also in 2019, Troy Clair, CEO of Clair Global and a co-founder of Rock Lititz, paid $186,000 for Bruno Mars’ production company’s $200,000 credit. All told, Clair-related entities bought $950,000 in credits since 2019.
Clair said his purchase of a tax credit was a way to support the live events industry.
"I believe it is important to support the clients that support my business, and to lead by example. My decision to purchase client tax credits reflects my belief in the EEEP’s mission to support artists and productions that are essential to the success of the live events industry in Pennsylvania,” Clair said in an email. “I saw this as an opportunity to reinvest in the industry that sustains my business, employees and the Pennsylvania live events industry, further strengthening the ecosystem that benefits both artists and production companies."
In addition to Clair and Davis, state records show that other businesspeople who also bought tax credits were based in Lancaster County. Matthew Buckwalter bought $390,000 in EEEP credits. Buckwalter was owner of an East Hempfield Township home service company that was acquired by a private equity firm in 2024. Former county GOP leader Matthew Kirk bought $266,149 in tax credits, while Scott D. Bowser, CEO of the Pennsylvania Renaissance Faire, bought $123,000 worth of credits.
In the only comprehensive study of the program in 2021, the state’s Independent Fiscal Office recommended that the tax credit should be made refundable. That would mean instead of selling tax credits when they don’t owe a lot of taxes, Rock Lititz clients could just receive the credit’s value. Tax credits are amounts subtracted from the bottom line on a tax return and reduce taxes only until it reaches $0.
The sale of tax credits are often arranged by third parties like GSL that are paid a percentage of the sale — money that does not end up in state coffers nor contribute to the live event industry.
“The fees and discounts charged by third parties represent leakage and do not contribute to the economic output of the industry,” the IFO wrote.
John C. Bear of GSL said the company provides consulting services to touring entities seeking the EEEP tax credit. It has an office based at Rock Lititz.
“If one of our clients receives a tax credit, we sell its credit as part of our consulting services,” Bear said in an email. Bear is also a Republican Manheim Township commissioner. Since 2017, Bear has served as a chairman of a joint political action committee called "Building a Stronger Pennsylvania" organized by former Republican state Sen. Ryan Aument and Republican state Rep. Bryan Cutler, the local elected officials who championed the tax credit.
Bear is a longtime friend of Aument and Cutler. He was a frequent and significant contributor to Aument’s campaign and the joint committee. Kirk and Bowser also contributed to Aument’s campaign within the last five years.
READ: Here's how a tax credit for Rock Lititz was created and revised
Connecting with buyers
To connect with tax credit buyers, GSL solicits companies and local accounting firms for entities and individuals potentially owing a significant amount of state taxes.
“We ask if they would consider buying EEEP tax credits in addition to the other types of tax credits they are purchasing to reduce their tax liability,” Bear wrote.
Bear said the process takes between three and four months once a seller is given a tax credit certificate. If GSL is providing consulting services to a seller and once the seller has obtained its tax credit certificate from the Commonwealth, the seller selects offers from a list of potential buyers identified by GSL. The buyer and seller then complete the necessary state forms with the assistance of GSL.
“The entire process for our clients from initial EEEP application to the sale of the credit tends to take 18 to 24 months to complete,” he wrote.
Reporter Jaxon White contributed to this story.
