S T A T E O F N E W Y O R K
________________________________________________________________________
4309
2009-2010 Regular Sessions
I N A S S E M B L Y
February 3, 2009
___________
Introduced by M. of A. CANESTRARI -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to authorizing an empire state
digital media production credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The tax law is amended by adding a new section 30 to read
as follows:
S 30. EMPIRE STATE DIGITAL MEDIA PRODUCTION CREDIT. (A) ALLOWANCE OF
CREDIT. (1) A TAXPAYER WHICH IS A QUALIFIED DIGITAL MEDIA PRODUCTION
COMPANY, OR WHICH IS A SOLE PROPRIETOR OF A QUALIFIED DIGITAL MEDIA
PRODUCTION COMPANY OR WHICH IS A MEMBER OF A PARTNERSHIP THAT IS A QUAL-
IFIED DIGITAL MEDIA 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 SUBDI-
VISION (C) OF THIS SECTION, TO BE COMPUTED AS PROVIDED IN THIS SECTION.
(2) THE STATE HAS ANNUALLY SEVEN MILLION DOLLARS IN TOTAL TAX CREDITS
TO DISBURSE TO ALL QUALIFIED DIGITAL MEDIA COMPANIES. THE SEVEN MILLION
DOLLARS IN TOTAL TAX CREDITS SHALL BE ALLOCATED ACCORDING TO SUBPARA-
GRAPHS (I), (II) AND (III) OF THIS PARAGRAPH:
(I) THE STATE ANNUALLY WILL DISBURSE FOUR MILLION DOLLARS OF THE TOTAL
SEVEN MILLION DOLLARS IN TAX CREDITS TO ALL QUALIFIED DIGITAL MEDIA
COMPANIES AND 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 TWEN-
TY PERCENT OF THE QUALIFIED DIGITAL MEDIA PRODUCTION COSTS PAID OR
INCURRED IN THE PRODUCTION OF THE QUALIFIED DIGITAL MEDIA CONTENT,
PROVIDED THAT THE QUALIFIED DIGITAL MEDIA 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 QUAL-
IFIED DIGITAL MEDIA CONTENT. TO BE ELIGIBLE FOR SUCH CREDIT, THE TOTAL
QUALIFIED DIGITAL MEDIA PRODUCTION COSTS OF A QUALIFIED DIGITAL MEDIA
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02664-01-9
A. 4309 2
COMPANY MUST BE GREATER IN THE AGGREGATE DURING THE CURRENT CALENDAR
YEAR THAN THE AVERAGE OF THE THREE PREVIOUS YEARS FOR WHICH THE CREDIT
WAS APPLIED. PROVIDED, HOWEVER, THAT UNTIL A QUALIFIED DIGITAL MEDIA
COMPANY HAS ESTABLISHED A THREE YEAR HISTORY, THE CREDIT WILL BE BASED
ON EITHER THE PREVIOUS YEAR OR THE AVERAGE OF THE TWO PREVIOUS YEARS,
WHICHEVER IS GREATER. IF THE QUALIFIED DIGITAL MEDIA COMPANY HAS NEVER
APPLIED FOR THE GROWTH CREDIT, THE PREVIOUS YEAR'S DATA WILL BE USED TO
CREATE A BENCHMARK. THE TAX CREDIT SHALL BE APPLIED ONLY TO THE AMOUNT
OF THE TOTAL QUALIFIED DIGITAL MEDIA PRODUCTION COSTS OF THE CURRENT
CALENDAR YEAR THAT ARE GREATER THAN THE TOTAL AMOUNT OF QUALIFIED
DIGITAL MEDIA PRODUCTION COSTS OF THE PRECEDING CALENDAR YEAR. THE TAX
CREDIT MUST BE DISTRIBUTED TO QUALIFIED DIGITAL MEDIA COMPANIES ON A PRO
RATA BASIS. THE CREDIT SHALL BE ALLOWED FOR THE TAXABLE YEAR IN WHICH
THE PRODUCTION OF SUCH QUALIFIED DIGITAL MEDIA CONTENT IS COMPLETED.
(II) THE STATE ANNUALLY WILL DISBURSE ONE AND ONE-HALF MILLION DOLLARS
OF THE TOTAL SEVEN MILLION DOLLARS IN TAX CREDITS TO ALL QUALIFIED
DIGITAL MEDIA COMPANIES WHO PRODUCE QUALIFIED DIGITAL MEDIA CONTENT
WITHIN THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT AS DEFINED IN
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 DIGITAL MEDIA PRODUCTION COSTS PAID OR INCURRED IN THE
PRODUCTION OF THE DIGITAL MEDIA CONTENT, PROVIDED THAT THE QUALIFIED
DIGITAL MEDIA 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 DIGITAL MEDIA CONTENT. TO BE ELIGI-
BLE FOR SUCH CREDIT, THE TOTAL QUALIFIED DIGITAL MEDIA PRODUCTION COSTS
OF A QUALIFIED PRODUCTION COMPANY MUST BE GREATER THAN FIFTY THOUSAND
DOLLARS IN THE AGGREGATE DURING THE CALENDAR YEAR. SUCH CREDIT WILL BE
APPLIED TO QUALIFIED DIGITAL MEDIA PRODUCTION COSTS EXCEEDING FIFTY
THOUSAND DOLLARS IN A CALENDAR YEAR.
(III) THE STATE ANNUALLY WILL DISBURSE TWO AND ONE-HALF MILLION
DOLLARS OF THE TOTAL SEVEN MILLION DOLLARS IN TAX CREDITS TO ALL QUALI-
FIED DIGITAL MEDIA COMPANIES WHO PRODUCE QUALIFIED DIGITAL MEDIA CONTENT
OUTSIDE OF THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT AS DEFINED
IN 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 DIGITAL MEDIA PRODUCTION COSTS PAID OR INCURRED IN THE
PRODUCTION OF THE QUALIFIED DIGITAL MEDIA CONTENT, PROVIDED THAT THE
QUALIFIED DIGITAL MEDIA PRODUCTION COSTS PAID OR INCURRED ARE ATTRIBUT-
ABLE TO THE USE OF TANGIBLE PROPERTY OR THE PERFORMANCE OF SERVICES
WITHIN THE STATE IN THE PRODUCTION OF SUCH QUALIFIED DIGITAL MEDIA
CONTENT. TO BE ELIGIBLE FOR SUCH CREDIT, THE TOTAL QUALIFIED DIGITAL
MEDIA PRODUCTION COSTS OF A QUALIFIED DIGITAL MEDIA COMPANY MUST BE
GREATER THAN ONE HUNDRED THOUSAND DOLLARS IN THE AGGREGATE DURING THE
CALENDAR YEAR. SUCH CREDIT WILL BE APPLIED TO QUALIFIED DIGITAL MEDIA
PRODUCTION COSTS EXCEEDING ONE HUNDRED THOUSAND DOLLARS IN A CALENDAR
YEAR.
(3) NO QUALIFIED DIGITAL MEDIA 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.
(B) DEFINITIONS. AS USED IN THIS SECTION, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
A. 4309 3
(1) "QUALIFIED DIGITAL MEDIA PRODUCTION COSTS" MEANS DIGITAL MEDIA
PRODUCTION COSTS ONLY TO THE EXTENT SUCH COSTS ARE ATTRIBUTABLE TO THE
USE OF PROPERTY OR THE PERFORMANCE OF SERVICES WITHIN THE STATE DIRECTLY
AND PREDOMINANTLY IN THE PRODUCTION (INCLUDING PRE-PRODUCTION AND POST-
PRODUCTION) OF QUALIFIED DIGITAL MEDIA CONTENT.
(2) "DIGITAL MEDIA 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 QUALIFIED
DIGITAL MEDIA CONTENT, INCLUDING, BUT NOT LIMITED TO, THE COST OF
COMPUTER SOFTWARE AND HARDWARE, DATA PROCESSING, VISUALIZATION TECHNOLO-
GIES, SOUND SYNCHRONIZATION, EDITING, AND THE RENTAL OF FACILITIES AND
EQUIPMENT. "DIGITAL MEDIA PRODUCTION COSTS" SHALL NOT INCLUDE (I) COSTS
INCURRED IN MARKETING, PROMOTION OR ADVERTISING DIGITAL MEDIA OR OTHER
COSTS NOT DIRECTLY RELATED TO THE PRODUCTION OF DIGITAL MEDIA CONTENT,
AND (II) COSTS RELATED TO THE ACQUISITION OR LICENSING OF DIGITAL MEDIA
CONTENT BY THE TAXPAYER FOR DISTRIBUTION OR INCORPORATION INTO THE
TAXPAYER'S DIGITAL MEDIA CONTENT.
(3) "QUALIFIED DIGITAL MEDIA CONTENT" MEANS ANY DATA OR INFORMATION
THAT IS PRODUCED IN DIGITAL FORM, INCLUDING DATA OR INFORMATION CREATED
IN ANALOG FORM BUT REFORMATTED IN DIGITAL FORM, TEXT, GRAPHICS, PHOTO-
GRAPHS, ANIMATION, SOUND AND VIDEO CONTENT. "QUALIFIED DIGITAL MEDIA
CONTENT" DOES NOT MEAN CONTENT OFFERINGS GENERATED BY THE END USER
(INCLUDING POSTINGS ON ELECTRONIC BULLETIN BOARDS AND CHAT ROOMS);
CONTENT OFFERINGS COMPRISED PRIMARILY OF LOCAL NEWS, EVENTS, WEATHER OR
LOCAL MARKET REPORTS; PUBLIC SERVICE CONTENT; ELECTRONIC COMMERCE PLAT-
FORMS (SUCH AS RETAIL AND WHOLESALE WEBSITES); WEBSITES OR CONTENT
OFFERINGS THAT CONTAIN OBSCENE MATERIAL; WEBSITES OR CONTENT THAT ARE
PRODUCED OR MAINTAINED PRIMARILY FOR PRIVATE, INDUSTRIAL, CORPORATE OR
INSTITUTIONAL PURPOSES; OR DIGITAL MEDIA CONTENT ACQUIRED OR LICENSED BY
THE TAXPAYER FOR DISTRIBUTION OR INCORPORATION INTO THE TAXPAYER'S
DIGITAL MEDIA CONTENT.
(C) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
(1) ARTICLE 9-A: SECTION 210: SUBDIVISION 41.
(2) ARTICLE 22: SECTION 606: SUBSECTION (QQ).
S 2. Section 210 of the tax law is amended by adding a new subdivision
41 to read as follows:
41. EMPIRE STATE DIGITAL MEDIA PRODUCTION CREDIT. (A) ALLOWANCE OF
CREDIT. A TAXPAYER THAT IS ELIGIBLE PURSUANT TO THE PROVISIONS OF
SECTION THIRTY OF THIS CHAPTER SHALL BE ALLOWED A CREDIT TO BE COMPUTED
AS PROVIDED IN SUCH SECTION THIRTY OF THIS CHAPTER AGAINST THE TAX
IMPOSED BY THIS ARTICLE.
(B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS
SECTION. PROVIDED, HOWEVER, THAT IF THE AMOUNT OF THE CREDIT ALLOWABLE
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, FIFTY PERCENT OF THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT
OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHTY-EIGHT OF
THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON. THE
BALANCE OF SUCH CREDIT NOT CREDITED OR REFUNDED IN SUCH TAXABLE YEAR MAY
BE CARRIED OVER TO THE IMMEDIATELY SUCCEEDING TAXABLE YEAR AND MAY BE
DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR. THE EXCESS, IF ANY, OF
THE AMOUNT OF CREDIT OVER THE TAX FOR SUCH SUCCEEDING YEAR SHALL BE
A. 4309 4
TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORD-
ANCE WITH THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS
CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION
ONE THOUSAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST
SHALL BE PAID THEREON.
S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law, as amended by section 2 of part ZZ-1 of chapter 57 of
the laws of 2008, is amended to read as follows:
(B) shall be treated as the owner of a new business with respect to
such share if the corporation qualifies as a new business pursuant to
paragraph (j) of subdivision twelve of section two hundred ten of this
chapter.
The corporation's credit base under
section two hundred ten or section
With respect to the following fourteen hundred fifty-six of this
credit under this section: chapter is:
Investment tax credit Investment credit base
under subsection (a) or qualified
rehabilitation
expenditures under
subdivision twelve of
section two hundred ten
Empire zone Cost or other basis
investment tax credit under subdivision
under subsection (j) twelve-B
of section two hundred
ten
Empire zone Eligible wages under
wage tax credit subdivision nineteen of
under subsection (k) section two hundred ten
or subsection (e) of
section fourteen hundred
fifty-six
Empire zone Qualified investments
capital tax credit and contributions under
under subsection (l) subdivision twenty of
section two hundred ten
or subsection (d) of
section fourteen hundred
fifty-six
Agricultural property tax Allowable school
credit under subsection (n) district property taxes under
subdivision twenty-two of
section two hundred ten
Credit for employment Qualified first-year wages or
of persons with dis- qualified second-year wages
abilities under under subdivision
subsection (o) twenty-three of section
two hundred ten
A. 4309 5
or subsection (f)
of section fourteen
hundred fifty-six
Employment incentive Applicable investment credit
credit under subsec- base under subdivision
tion (a-1) twelve-D of section two
hundred ten
Empire zone Applicable investment
employment credit under sub-
incentive credit under division twelve-C
subsection (j-1) of section two hundred ten
Alternative fuels credit Cost under subdivision
under subsection (p) twenty-four of section two
hundred ten
Qualified emerging Applicable credit base
technology company under subdivision twelve-E
employment credit of section two hundred ten
under subsection (q)
Qualified emerging Qualified investments under
technology company subdivision twelve-F of
capital tax credit section two hundred ten
under subsection (r)
Credit for purchase of an Cost of an automated
automated external defibrillator external defibrillator under
under subsection (s) subdivision twenty-five of
section two hundred ten
or subsection (j) of section
fourteen hundred fifty-six
Low-income housing Credit amount under
credit under subsection (x) subdivision thirty
of section two hundred ten or
subsection (l) of section
fourteen hundred fifty-six
Credit for transportation Amount of credit under sub-
improvement contributions division thirty-two of section
under subsection (z) two hundred ten or subsection
(n) of section fourteen
hundred fifty-six
QEZE credit for real property Amount of credit under
taxes under subsection (bb) subdivision twenty-seven of
section two hundred ten or
subsection (o) of section
fourteen hundred fifty-six
QEZE tax reduction credit Amount of benefit period
under subsection (cc) factor, employment increase factor
and zone allocation
A. 4309 6
factor (without regard
to pro ration) under
subdivision twenty-eight of
section two hundred ten or
subsection (p) of section
fourteen hundred fifty-six
and amount of tax factor
as determined under
subdivision (f) of section sixteen
Green building credit Amount of green building credit
under subsection (y) under subdivision thirty-one
of section two hundred ten
or subsection (m) of section
fourteen hundred fifty-six
Credit for long-term Qualified costs under
care insurance premiums subdivision twenty-five-a of
under subsection (aa) section two hundred ten
or subsection (k) of section
fourteen hundred fifty-six
Brownfield redevelopment Amount of credit
credit under subsection under subdivision
(dd) thirty-three of section
two hundred ten
or subsection (q) of
section fourteen hundred
fifty-six
Remediated brownfield Amount of credit under
credit for real property subdivision thirty-four
taxes for qualified of section two hundred
sites under subsection ten or subsection (r) of
(ee) section fourteen hundred
fifty-six
Environmental Amount of credit under
remediation subdivision thirty-five of
insurance credit under section two hundred
subsection (ff) ten or subsection
(s) of section
fourteen hundred
fifty-six
Empire state film production Amount of credit for qualified
credit under subsection (gg) production costs in production
of a qualified film under
subdivision thirty-six of
section two hundred ten
Qualified emerging Qualifying expenditures and
technology company facilities, development activities under
operations and training credit subdivision twelve-G of section
under subsection (nn) two hundred ten
A. 4309 7
Security training tax Amount of credit
credit under under subdivision thirty-seven
subsection (ii) of section two hundred ten or
under subsection (t) of
section fourteen hundred fifty-six
Credit for qualified fuel Amount of credit under
cell electric generating equipment subdivision thirty-seven
expenditures under subsection (g-2) of section two hundred ten
or subsection (t) of
section fourteen hundred
fifty-six
Empire state commercial production Amount of credit for qualified
credit under subsection (jj) production costs in production
of a qualified commercial under
subdivision thirty-eight of sec-
tion two hundred ten
Biofuel production Amount of credit
tax credit under under subdivision
subsection (jj) thirty-eight of
section two hundred ten
Clean heating fuel credit Amount of credit under
under subsection (mm) subdivision thirty-nine of
section two hundred ten
Credit for rehabilitation Amount of credit under
of historic properties subdivision forty of
under subsection (oo) subsection two hundred ten
Credit for companies who Amount of credit under
provide transportation subdivision forty of
to individuals section two hundred ten
with disabilities
under subsection (oo)
EMPIRE STATE DIGITAL MEDIA AMOUNT OF CREDIT FOR QUALIFIED
PRODUCTION CREDIT UNDER SUBSECTION PRODUCTION COSTS IN
(QQ) PRODUCTION OF QUALIFIED DIGITAL
MEDIA CONTENT UNDER SUBDIVISION
FORTY-ONE OF SECTION
TWO HUNDRED TEN
S 4. Section 606 of the tax law is amended by adding a new subsection
(qq) to read as follows:
(QQ) EMPIRE STATE DIGITAL MEDIA PRODUCTION CREDIT. (1) ALLOWANCE OF
CREDIT. A TAXPAYER THAT IS ELIGIBLE PURSUANT TO SECTION THIRTY OF THIS
CHAPTER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH
SECTION THIRTY AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
YEAR, FIFTY PERCENT OF THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF
TAX TO BE CREDITED OR REFUNDED AS PROVIDED IN SECTION SIX HUNDRED EIGHT-
Y-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID
A. 4309 8
THEREON. THE BALANCE OF SUCH CREDIT NOT CREDITED OR REFUNDED IN SUCH
TAXABLE YEAR MAY BE CARRIED OVER TO THE IMMEDIATELY SUCCEEDING TAXABLE
YEAR AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR. THE
EXCESS, IF ANY, OF THE AMOUNT OF THE CREDIT OVER THE TAX FOR SUCH
SUCCEEDING YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED
OR REFUNDED AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTI-
CLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
S 5. This act shall take effect immediately and shall apply to taxable
years beginning on and after January 1, 2009 with respect to qualified
digital media production costs paid or incurred on or after such date,
regardless of whether the production of the qualified digital media
content commenced before such date; provided, however that the empire
state film production credit under subsection (gg), the empire state
commercial production credit under subsection (jj) and the credit for
companies who provide transportation to individuals with disabilities
under subsection (oo) of section 606 of the tax law contained in section
three of this act shall expire on the same date as provided in section 9
of part P of chapter 60 of the laws of 2004, as amended, section 10 of
part V of chapter 62 of the laws of 2006, as amended and section 5 of
chapter 522 of the laws of 2006, as amended respectively.