LOS ANGELES (Hollywood Reporter) - Boston is fast becoming Hollywood Northeast.

Martin Scorsese's "The Departed" was set in the Bay State and more than half of the film was shot on location, but only about $6 million of its $90 million budget was spent in Massachusetts, with a larger amount of the location work going to New York, according to Nicholas Paleologos, executive director of the Massachusetts Film Office.

"Fast-forward 24 months: 'The Pink Panther 2' had nothing to do with Massachusetts and not a single scene takes place in Massachusetts -- but Massachusetts got the lion's share of the location spending," he said.

In large part, this trend can be attributed to an aggressive tax incentive plan allowing productions that drop more than $50,000 in Massachusetts to receive a 25% rebate on everything they spend in the state.

Nine major features were shot in Massachusetts this year, pouring more than $125 million in direct expenditure into the local economy, up 150% from 2006, said Paleologos

"Before (the incentives), those pictures would stay in the state for a week or two shooting exteriors and then shoot in another place where they could get a tax credit," he said.

Contributing to the program's success to some degree is the greenback's slide against the Canadian dollar, prompting producers to look for cheaper location options in the States. And Boston has been met with enthusiasm.

"Everywhere you turn, the camera is a feast for your eyes," said Mike Paseornek, president of production at Lionsgate. "Boston has not ever been overused as a city for a setting in movies. You have a fresh look at something audiences haven't seen for quite a while.