N.Y.
Tax Law Section 28
Empire state commercial production credit
(a)
Allowance of credit.(1)
A taxpayer which is a qualified commercial production company, or which is a sole proprietor of a qualified commercial production company, and which is subject to tax under article nine-A or twenty-two of this chapter, shall be allowed a credit against such tax, pursuant to the provisions referenced in subdivision (c) of this section, to be computed as provided in this section. Provided, however, to be eligible for such credit, at least seventy-five percent of the production costs (excluding post production costs) paid or incurred directly and predominantly in the actual filming or recording of the qualified commercial must be costs incurred in New York state. The tax credit allowed pursuant to this section shall apply to taxable years beginning before January first, two thousand twenty-nine.(2)
The state has annually seven million dollars in total tax credits to disburse to all eligible commercial production companies. The seven million dollars in total tax credits shall be allocated according to subparagraphs (i) and (ii) of this paragraph:(i)
The state annually will disburse four million of the total seven million in tax credits to all eligible production companies who film or record qualified commercials within the metropolitan commuter transportation district as defined in Public Authorities Law § 1262 (Metropolitan commuter transportation district)section twelve hundred sixty-two of the public authorities law. The amount of the credit shall be the product (or pro rata share of the product, in the case of a member of a partnership) of twenty percent of the qualified production costs paid or incurred in the production of a qualified commercial, provided that the qualified production costs paid or incurred are attributable to the use of tangible property or the performance of services within the state in the production of such qualified commercial. To be eligible for said credit the total qualified production costs of a qualified production company must be greater than five hundred thousand dollars in the aggregate during the calendar year. Such credit will be applied to qualified production costs exceeding five hundred thousand dollars in a calendar year.(ii)
The state annually will disburse three million of the total seven million in tax credits to all eligible production companies who film or record a qualified commercial outside of the metropolitan commuter transportation district as defined in Public Authorities Law § 1262 (Metropolitan commuter transportation district)section twelve hundred sixty-two of the public authorities law; provided, however, that if, after July thirty-first the state reviews all applications from eligible production companies who film or record a qualified commercial outside of the metropolitan commuter district for a given year, tax credits remain unallocated under this subparagraph, those credits shall be allotted to the credits set forth in subparagraph (i) of this paragraph for use consistent with the purposes of such subparagraph. The amount of the credit shall be the product (or pro rata share of the product, in the case of a member of a partnership) of thirty percent of the qualified production costs paid or incurred in the production of a qualified commercial, provided that the qualified production costs paid or incurred are attributable to the use of tangible property or the performance of services within the state in the production of such qualified commercial. To be eligible for said credit the total qualified production costs of a qualified production company must be greater than one hundred thousand dollars in the aggregate during the calendar year. Such credit will be applied to all qualified production costs in a calendar year.(3)
No qualified production costs used by a taxpayer either as the basis for the allowance of the credit provided for under this section or used in the calculation of the credit provided for under this section shall be used by such taxpayer to claim any other credit allowed pursuant to this chapter.(4)
Notwithstanding any provisions of this section to the contrary, a corporation or partnership, which otherwise qualifies as a qualified commercial production company, and is similar in operation and in ownership to a business entity or entities taxable, or previously taxable, under section one hundred eighty-three or one hundred eighty-four or former section one hundred eighty-five of article nine; article nine-A or thirty-three of this chapter or which would have been subject to tax under article 23 (Metropolitan Commuter Transportation Mobility Tax)article twenty-three of this chapter (as such article was in effect on January first, nineteen hundred eighty) or which would have been subject to tax under article thirty-two of this chapter (as such article was in effect on December thirty-first, two thousand fourteen) or the income or losses of which is or was includable under article 22 (Personal Income Tax)article twenty-two of this chapter shall not be deemed a new or separate business, and therefore shall not be eligible for empire state commercial production benefits, if it was not formed for a valid business purpose, as such term is defined in clause (D) of subparagraph one of paragraph (o) of subdivision nine of § 208 (Definitions)section two hundred eight of this chapter and was formed solely to gain empire state commercial production credit benefits.(b)
Definitions. As used in this section, the following terms shall have the following meanings:(1)
“Qualified production costs” means production costs only to the extent such costs are attributable to the use of tangible property or the performance of services within the state directly and predominantly in the production (including pre-production and post-production) of a qualified commercial.(2)
“Production costs” means any costs for tangible property used and services performed directly and predominantly in the production (including pre-production and post-production) of a qualified commercial. “Production costs” shall not include (i) costs for a story, script or scenario to be used for a qualified commercial and (ii) wages or salaries or other compensation for writers, directors, including music directors, producers and performers (other than background actors with no scripted lines who are employed by a qualified company and musicians). “Production costs” generally include technical and crew production costs, such as expenditures for commercial production facilities and/or location costs, or any part thereof, film, audiotape, videotape or digital medium, props, makeup, wardrobe, commercial processing, camera, sound recording, scoring, set construction, lighting, shooting, editing and meals. For purposes of this section, “post production costs” include the production of original content for a qualified commercial employing techniques traditionally used in post-production for visual effects, graphic design, animation, and musical composition. However, where the commercial consists in its entirety of techniques such as visual effects, graphic design, or animation, such costs incurred in the production of the commercial, when occurring in New York, shall be deemed qualified production costs for the purposes of this section. Provided further, however, that “post production costs” shall not include the editing of previously produced content for a qualified commercial.(3)
“Qualified commercial” means an advertisement of any length that is recorded on film, audiotape, videotape or digital medium in New York for multi-market distribution by way of radio, television networks, cable, satellite, motion picture theaters or internet. “Qualified commercial” shall not include (i) news or current affairs program, interview or talk program, network promos, i.e., commercials promoting television series or movies, “how-to” (i.e., instructional) commercial or program, commercial or program consisting entirely of stock footage, trailers promoting theatrical films, sporting event or sporting program, game show, award ceremony, daytime drama (i.e., daytime “soap opera”), or “reality” program, or(ii)
a production for which records are required under section 2257 of title 18, United States code, to be maintained with respect to any performer in such production (reporting of books, commercials, etc. with respect to sexually explicit conduct).(4)
“Qualified commercial production company” is a corporation, partnership, limited partnership, or other entity or individual which or who is principally engaged in the production of a qualified commercial and controls the production of the qualified commercial and is not the distributor, or the contracting entity for production of such commercial, nor is a variable interest entity of such distributor or contracting entity.(c)
The department of economic development shall submit, on or before December first of each year, to the governor, the director of the division of the budget, the temporary president of the senate, and the speaker of the assembly an annual report including, but not limited to, the following information regarding the previous calendar year:(1)
the total dollar amount of credits allocated, the name and address of each qualified commercial production company allocated credits under this section, the total amount of credits allocated to each qualified commercial production company, the total amount of qualified production costs and production costs for each qualified commercial production company, and the estimated number of employees, credit-eligible man hours, and credit-eligible wages associated with each qualified commercial production company allocated credits under this section;(2)
for qualified commercial production companies that were allocated credit pursuant to subparagraph (i) of paragraph two of subdivision (a) of this section: the name and address of each qualified commercial production company, the total dollar amount of credits allocated, the total amount of credits allocated to each qualified commercial production company, total qualified production costs and production costs for each qualified production company, and the estimated number of employees, credit-eligible man hours, and credit-eligible wages associated with each qualified commercial production company that filmed or recorded a qualified commercial within the district;(3)
for qualified commercial production companies that were allocated credit pursuant to subparagraph (ii) of paragraph two of subdivision (a) of this section: the name and address of each qualified commercial production company, the total dollar amount of credits allocated, the total amount of credits allocated to each qualified commercial production company, total qualified production costs and production costs for each qualified production company, and the estimated number of employees, credit-eligible man hours, and credit-eligible wages associated with each qualified commercial production company that filmed or recorded a qualified commercial outside the district; and(4)
the amount of credits reallocated to all eligible qualified commercial production companies pursuant to subparagraph (ii) of paragraph two of subdivision (a) of this section.(5)
The report may also include any recommendations for changes in the calculation or administration of the credit, recommendations regarding continuing modification or repeal of this credit, and any other information regarding this credit as may be useful and appropriate.(d)
Cross-references. For application of the credit provided for in this section, see the following provision of this chapter:(1)
article 9-A: section 210-B: subdivision 23.(2)
article 22: section 606: subsection (jj). * NB There are 2 § 28’s
Source:
Section 28 — Empire state commercial production credit, https://www.nysenate.gov/legislation/laws/TAX/28 (updated May 12, 2023; accessed Oct. 26, 2024).
