senate Bill S2027

Amended

Relates to the empire state film production tax credit

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Jan / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 28 / Mar / 2014
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 28 / Mar / 2014
    • PRINT NUMBER 2027A

Summary

Relates to the allocation of the empire state film production credit against taxes for certain film production costs issued by a city having a population of one million or more.

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Bill Details

See Assembly Version of this Bill:
A5621
Versions:
S2027
S2027A
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd ยง1201-a, Tax L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S2883, A5562
2009-2010: S5674, A8761

Sponsor Memo

BILL NUMBER:S2027

TITLE OF BILL: An act to amend the tax law, in relation to the allo-
cation of such credit against taxes for certain film production costs
issued by a city having a population of one million or more

PURPOSE: This legislation would ensure the "Made in NY" film production
tax credit would be sustained through 2013.

SUMMARY OF PROVISIONS:

Section 1 of this bill would amend Tax Law ยง 1201-a(b), the section that
authorizes the City of New York to amend its General Corporation Tax
("GCT") and its Unincorporated Business Tax ("UBT") with respect to the
Empire State Film Production Credit. This proposal would (1) reduce the
City credit rate from five percent to four percent; (2) phase out the
credit for television series: after three years of receiving the full
credit, a television series would receive a three percent credit in year
four of the program, a two percent credit in year five, and no credit
thereafter; and (3) establish a cap of $250,000 in credits per qualified
film or episode of a qualified television series; for those productions
incurring more than 75t of their post production costs in New York City,
the cap would be $300,000.

Section 2 of the bill would amend Section 7(b) of part P of Chapter 60
of the Laws of 2004 to provide that if any of the aggregate amount of
tax credits that are available in a given year remain unallocated in
such year, they would be available for allocation in a subsequent year.

Section 3 of the bill would amend Section 7 of part P of chapter 60 of
the laws of 2004 by adding two new subdivisions (f) and (g). Subdivi-
sion (f) would provide that the tax credits allocated in 2011 under the
GCT and UST would not exceed $24 million, and if the amount of credits
applied for reaches $24 million, additional tax credit applications
would not be accepted until on or after January 1, 2012. Subdivision
(g) would provide for an additional aggregate annual amount of $24
million to be allowed in 2012 and 2013, in $12 million increments for
the periods January 1st through June 30th, and from July 1st through
December 31st, for each of these years. Moreover, should the total
amount of allocated credits applied for in any of such six-month periods
reach the allowed additional aggregate amount of $12 million, additional
tax credit applications would not be accepted until the first day of the
next six-month period which has tax credits available for allocation.

Section 4 of the bill provides that the law would take effect immediate-
ly and would apply to taxable years beginning on or after January 1,
2011, and to applications filed on or after such date.

JUSTIFICATION: This bill will secure funding for the "Made in NY" film
production credit through the end of 2013. Given the fiscal constraints
facing the City, this legislation would also contain measures to enhance

the program's effectiveness as an incentive and to better target the tax
credit. These proposals represent a carefully crafted plan to share the
sacrifices needed to cope with the fiscal challenges facing the City
while preserving the film production credit program as a viable incen-
tive to attract film and television production to New York City. The
legislation does not apply to that portion of the program that is
particular to New York City, which has been enacted through the City's
GCT and the UBT.

The annual cap of $24 million and the overall reduction of the City
credit rate from five percent to four percent would limit the City's
exposure to excessive program costs and allow for improved future fiscal
planning. The television series phase-out would provide a credit for the
first five years of a series, after which these successful and estab-
lished television series would no longer be eligible for the credit. The
per-production cap would preserve the full credit for independent
features and for television series, which provide year-round employment,
and a graduated percentage reduction for large-budget feature films.

Both the City and State have taken a number of important steps to
provide incentives to the film and television industry, because it is an
important contributor to the City's economy. The New York City's Mayor's
Office of Film, Theatre & Broadcasting has dramatically enhanced the
range of services that it offers to the industry. Combined with the
State credit, the "Made in NY" film production tax credit, enacted in
January 2005, has been a major success in attracting film and television
production to New York City. Production spending for qualifying film
and television projects increased significantly since 2004, accounting
for an additional $5 billion in direct spending while providing thou-
sands of additional jobs. These increases were evident in all production
areas: feature films, independent films, television series and pilots.

Through the "Made in NY" film production tax credit, New York City is
the only municipality in the United States offering a tax credit incen-
tive to the film and television industry. This extension of the program
will ensure its continued success.

LEGISLATIVE HISTORY: 2012: S.2883/A5562 (Squadron/Englebright) 2010:
S.5674/A.8761 (Schneiderman/Englebright)

FISCAL IMPLICATIONS: No new fiscal implications to the State.

EFFECTIVE DATE: This act shall take effect immediately and shall apply
to taxable years beginning on or after January 1, 2013; provided further
that this act shall apply to applications filed on or after January 1,
2013.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2027

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by Sen. SQUADRON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to the allocation of such cred-
  it against taxes for certain film production costs issued  by  a  city
  having a population of one million or more

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision (b) of  section  1201-a  of  the  tax  law,  as
amended  by  section  5  of part Y of chapter 62 of the laws of 2006, is
amended to read as follows:
  (b) Empire state film production credit. Any city in this state having
a population of one million or more, acting through its  local  legisla-
tive body, is hereby authorized to adopt and amend local laws to allow a
credit  against the general corporation tax and the unincorporated busi-
ness tax imposed pursuant to the  authority  of  chapter  seven  hundred
seventy-two  of  the  laws  of nineteen hundred sixty-six which shall be
substantially identical to the credit allowed under section  twenty-four
of this chapter, except that:
  (A) (I) the percentage of qualified production costs used to calculate
such credit shall be [five] FOUR percent,
  (II)  FOR  A TELEVISION SERIES WITH RESPECT TO WHICH A CREDIT HAS BEEN
ALLOWED (1) IN THREE TAXABLE YEARS, THE AMOUNT OF THE  CREDIT  SHALL  BE
THREE PERCENT, (2) IN FOUR TAXABLE YEARS, THE AMOUNT OF THE CREDIT SHALL
BE TWO PERCENT, AND
  (III)  NO  CREDIT SHALL BE ALLOWED WITH RESPECT TO A TELEVISION SERIES
FOR WHICH A CREDIT HAS BEEN ALLOWED IN FIVE TAXABLE YEARS;
  (B) SUCH CREDIT SHALL NOT EXCEED TWO HUNDRED  FIFTY  THOUSAND  DOLLARS
PER  QUALIFIED  FILM  OR  EPISODE  OF A QUALIFIED TELEVISION SERIES WITH
RESPECT TO QUALIFIED PRODUCTION COSTS; PROVIDED, HOWEVER,  THAT  IF  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05563-01-3

S. 2027                             2

QUALIFIED  POST PRODUCTION COSTS PAID OR INCURRED WHICH ARE ATTRIBUTABLE
TO THE USE OF TANGIBLE PROPERTY OR THE PERFORMANCE OF SERVICES AT A FILM
POST PRODUCTION FACILITY WITHIN THE CITY OF NEW YORK IN  THE  PRODUCTION
OF  SUCH  QUALIFIED FILM EQUAL OR EXCEED SEVENTY-FIVE PERCENT OF ALL THE
POST PRODUCTION COSTS PAID OR INCURRED WHICH ARE ATTRIBUTABLE TO THE USE
OF TANGIBLE PROPERTY OR THE PERFORMANCE OF SERVICES  AT  ANY  FILM  POST
PRODUCTION  FACILITY  WITHIN  AND  WITHOUT THE CITY IN THE PRODUCTION OF
SUCH QUALIFIED FILM, THEN THE AGGREGATE ANNUAL  MAXIMUM  ALLOWED  CREDIT
SHALL BE THREE HUNDRED THOUSAND DOLLARS,
  [(B)] (C) whenever such section twenty-four references the state, such
words shall be read as referencing the city,
  [(C)]  (D)  such credit shall be allowed only to a taxpayer which is a
qualified film production company, [and
  (D)] (E) the effective date of such credit shall be  July  first,  two
thousand  six.  Such credit shall be applied in a manner consistent with
the credit allowed under subdivision thirty-six of section  two  hundred
ten  of  this  chapter  except  as may be necessary to take into account
differences between the general corporation tax and  the  unincorporated
business tax, AND
  (F) FOR PURPOSES OF THIS SUBDIVISION, "TELEVISION SERIES" OR "EPISODIC
TELEVISION  SERIES" MEANS A RECURRING PRODUCTION INTENDED IN ITS INITIAL
RUN   FOR   BROADCAST   ON   TELEVISION,   WHETHER   FREE   OR   THROUGH
SUBSCRIPTION-BASED  SERVICE,  THAT HAS A RUNNING TIME OF AT LEAST THIRTY
MINUTES IN LENGTH, INCLUSIVE OF COMMERCIAL ADVERTISEMENT  AND  INTERSTI-
TIAL PROGRAMMING.
  S 2. This act shall take effect immediately and shall apply to taxable
years  beginning on or after January 1, 2013; provided further that this
act shall apply to applications filed on or after January 1, 2013.

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