senate Bill S6766

2013-2014 Legislative Session

Relates to raising existing and creating new tax credits for qualifying commercial production companies

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Archive: Last Bill Status - In Committee


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

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Mar 07, 2014 referred to investigations and government operations

S6766 - Bill Details

Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd §§28 & 606, Tax L; amd Part I §7, Chap 59 of 2012

S6766 - Bill Texts

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Raises existing and creates new tax credits for qualifying commercial production companies and extends duration of such tax credits.

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BILL NUMBER:S6766

TITLE OF BILL: An act to amend the tax law, in relation to empire
state commercial production credit; and to amend part I of chapter 59
of the laws of 2012, amending the tax law, relating to extending the
empire state commercial production tax credit; and to amend part V of
chapter 62 of the laws of 2006 relating to the empire state commercial
production tax credit, relating to the effectiveness thereof, in
relation to the effectiveness thereof

PURPOSE:

This bill increases the amount of tax credit available to eligible
production companies who film or record a qualified commercial in
upstate New York and creates a new tax credit available to eligible
post-production companies who perform work on a qualified commercial
in upstate New York.

SUMMARY OF PROVISIONS:

Section 1 extends the tax credit for qualified commercial production
companies to taxable years beginning before January first, two
thousand seventeen.

Section 2 amends section 28 of the tax law to increase the amount of
credit available to eligible production companies to the product of
eight percent of the qualified production costs paid or incurred in
the production of a qualified commercial. Additionally, this section
creates a new tax credit under the empire state commercial production
credit for eligible post-production companies. The amount of this
credit shall be the product of twenty percent for qualified
post-production costs paid or incurred in the production of a
qualified commercial. To be eligible for this credit, the total
qualified production costs must be greater than one hundred thousand
dollars in the aggregate during the calendar year for work performed
in the state.

Section 3 amends the closing paragraph of subdivision (a) of section
28 of the tax law to add commercial post-production companies.

Section 4 provides that post-production costs shall not include the
editing of previously produced content for a qualified commercial
except as otherwise provided specifically herein.

Section 5 amends subdivision (b) of section 28 of the tax law to
define a qualified commercial post-production company.

Section 6 extends the tax credit for eligible taxpayers pursuant to
provisions of section 28 of the tax law to taxable years beginning
before January first, two thousand seventeen.

Section 7 amends section 7 of part I of chapter 59 of the laws of 2012
and part V of chapter 62 of the laws of 2006 relating to the empire
state commercial production tax credit to extend the tax credit to
calendar years beginning before January 1, 2017.

Section 8 sets the effective date as immediate.


JUSTIFICATION:

The current Empire State film production credit disburses three
million of the total seven million in tax credits to eligible
production companies who film or record a qualified commercial in
upstate New York. If this money is not used up at the end of the year,
the remaining amount goes to eligible production companies who film or
record a qualified commercial in New York City.

This bill seeks to encourage the three million in tax credits
allocated for outside of New York City to be fully utilized. To do so,
this bill does two things. First, it increases the amount of tax
credit available to eligible production companies from the product of
five percent of the qualified production costs to the product of eight
percent of these costs. Second, it creates a new tax credit for
eligible post-production companies in the amount of the product of
twenty percent of post-production costs. Post-production companies are
eligible for the credit if total qualified production costs are
greater than S100,000.

Lastly, this bill extends the availability of such tax credits to
taxable years beginning before January first, two thousand seventeen.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

Immediate.

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

                                  6766

                            I N  S E N A T E

                              March 7, 2014
                               ___________

Introduced  by Sen. GALLIVAN -- 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  empire  state  commercial
  production  credit;  and  to amend part I of chapter 59 of the laws of
  2012, amending the tax law, relating to  extending  the  empire  state
  commercial production tax credit; and to amend part V of chapter 62 of
  the  laws  of  2006 relating to the empire state commercial production
  tax credit, relating to the effectiveness thereof, in relation to  the
  effectiveness thereof

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

  Section 1. Paragraph 1 of subdivision (a) of section  28  of  the  tax
law,  as  amended  by  section  1 of part I of chapter 59 of the laws of
2012, is amended to read as follows:
  (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] 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 [fifteen] SEVENTEEN.
  S 2. Subparagraph (iii) of paragraph 2 of subdivision (a)  of  section
28  of  the  tax law, as amended by section 2 of part I of chapter 59 of
the laws of 2012, is amended to read as follows:
  (iii) 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 commu-
ter transportation district as defined in section twelve hundred  sixty-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14233-04-4

S. 6766                             2

two  of  the public authorities law, AND FOR WORK PERFORMED BY QUALIFIED
POST-PRODUCTION COMPANIES FOR QUALIFIED POST-PRODUCTION  WORK  PERFORMED
OUTSIDE SUCH METROPOLITAN TRANSPORTATION DISTRICT ON A QUALIFIED COMMER-
CIAL,  AS  PROVIDED  HEREIN; provided, however, that if, after 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, AND WORK PERFORMED BY QUALIFIED  POST-PRODUC-
TION COMPANIES FOR QUALIFIED POST-PRODUCTION WORK PERFORMED OUTSIDE SUCH
METROPOLITAN  TRANSPORTATION  DISTRICT  ON  A  QUALIFIED COMMERCIAL, tax
credits remain unallocated under this subparagraph, those credits  shall
be  allotted  to the credits set forth in subparagraph (i) of this para-
graph 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  [five]  EIGHT
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 tangi-
ble 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  two  hundred  thousand dollars in the aggregate
during the calendar year. Such  credit  will  be  applied  to  qualified
production  costs  exceeding  two hundred thousand dollars in a calendar
year.  IN ADDITION TO THE FOREGOING, 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 FOR QUALIFIED POST-PRODUCTION  COSTS
PAID OR INCURRED IN THE PRODUCTION OF A QUALIFIED COMMERCIAL BY A QUALI-
FIED  COMMERCIAL  POST-PRODUCTION  COMPANY WHICH ARE ATTRIBUTABLE TO THE
USE OF TANGIBLE PROPERTY OR THE PERFORMANCE OF SERVICES WITHIN THE STATE
AND PERFORMED OUTSIDE THE  METROPOLITAN  TRANSPORTATION  DISTRICT  ON  A
QUALIFIED COMMERCIAL. TO BE ELIGIBLE FOR SUCH POST-PRODUCTION 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 FOR WORK PERFORMED IN NEW YORK STATE. SUCH CREDIT WILL  BE
APPLIED  TO  QUALIFIED  PRODUCTION  COSTS EXCEEDING ONE HUNDRED THOUSAND
DOLLARS IN A CALENDAR YEAR. AS USED IN THIS SUBPARAGRAPH,  "POST-PRODUC-
TION  WORK" OR "QUALIFIED POST-PRODUCTION WORK" MEANS ANY WORK PERFORMED
BY A QUALIFIED COMMERCIAL PRODUCTION COMPANY OR BY A  QUALIFIED  COMMER-
CIAL  POST-PRODUCTION  COMPANY  AS  SUCH  TERMS  ARE  DEFINED HEREIN AND
INCLUDES BUT IS NOT LIMITED TO EDITING, SOUND EDITING, SPECIAL  EFFECTS,
GRAPHICS,  COLOR TIMING OR FINISHING COSTS, AND WORK ASSOCIATED WITH 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, INCLUDING THE EDITING
OF PREVIOUSLY PRODUCED CONTENT FOR A QUALIFIED COMMERCIAL. THE  APPLICA-
TION  FOR  A  CREDIT  FOR  SUCH  QUALIFIED  POST-PRODUCTION COSTS MAY BE
REQUIRED AS A JOINT APPLICATION WITH THE APPLICATION FOR A CREDIT FOR  A
QUALIFIED COMMERCIAL.
  S 3. The closing paragraph of subdivision (a) of section 28 of the tax
law,  as added by section 2 of part V of chapter 62 of the laws of 2006,
is amended to read as follows:
  Notwithstanding any provisions of this  section  to  the  contrary,  a
corporation  or  partnership,  which  otherwise qualifies as a qualified
commercial production company, OR A COMMERCIAL POST-PRODUCTION  COMPANY,
and  is  similar  in  operation and in ownership to a business entity or
entities taxable, or  previously  taxable,  under  section  one  hundred

S. 6766                             3

eighty-three,  one  hundred  eighty-four  or  one hundred eighty-five of
article nine; article nine-A, article thirty-two or thirty-three of this
chapter or which would have been subject to tax  under  article  twenty-
three  of  this chapter (as such article was in effect on January first,
nineteen hundred eighty) or the income or losses  of  which  is  or  was
includable  under 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 subpar-
agraph one of paragraph (o) of subdivision nine of section  two  hundred
eight of this chapter and was formed solely to gain empire state commer-
cial production credit benefits.
  S  4.  Paragraph 2 of subdivision (b) of section 28 of the tax law, as
amended by chapter 448 of the laws  of  2009,  is  amended  to  read  as
follows:
  (2)  "Production costs" means any costs for tangible property used and
services performed directly and predominantly in the production (includ-
ing 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  sala-
ries  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 musi-
cians).  "Production  costs"  generally  include  technical   and   crew
production costs, such as expenditures for commercial production facili-
ties  and/or location costs, or any part thereof, film, audiotape, vide-
otape 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]
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]
POST-PRODUCTION costs" shall  not  include  the  editing  of  previously
produced  content  for  a  qualified  commercial,  EXCEPT  AS  OTHERWISE
PROVIDED SPECIFICALLY HEREIN.
  S 5. Subdivision (b) of section 28 of the tax law is amended by adding
a new paragraph 5 to read as follows:
  (5) "QUALIFIED COMMERCIAL POST-PRODUCTION COMPANY" IS  A  CORPORATION,
PARTNERSHIP, LIMITED PARTNERSHIP, OR OTHER ENTITY OR INDIVIDUAL WHICH OR
WHO IS PRINCIPALLY ENGAGED IN THE POST-PRODUCTION OF A QUALIFIED COMMER-
CIAL.
  S  6. Paragraph 1 of subsection (jj) of section 606 of the tax law, as
amended by section 4 of part I of chapter 59 of the  laws  of  2012,  is
amended to read as follows:
  (1)  Allowance  of credit. A taxpayer that is eligible pursuant to the
provisions of section twenty-eight of this chapter shall  be  allowed  a
credit  to  be  computed  as  provided  in  such section against the tax
imposed by this article. The tax credit allowed pursuant to this section
shall apply to taxable years beginning before January first,  two  thou-
sand [fifteen] SEVENTEEN.

S. 6766                             4

  S  7.  Section 7 of part I of chapter 59 of the laws of 2012, amending
the  tax  law,  relating  to  extending  the  empire  state   commercial
production  tax credit; and to amend part V of chapter 62 of the laws of
2006 relating to the empire  state  commercial  production  tax  credit,
relating to the effectiveness thereof, is amended to read as follows:
  S  7.  This  act  shall take effect immediately and shall be deemed to
have been in full force and effect  on  and  after  December  31,  2011;
provided, however, that the amendments to subparagraphs (i) and (iii) of
paragraph  2  of  subsection  (a)  of  section 28 of the tax law made by
section two of this act shall apply to calendar years beginning  on  and
after January 1, 2012 and before January 1, [2015] 2017.
  S  8. This act shall take effect immediately, and shall apply to taxa-
ble years beginning on and after January 1, 2014.

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