S T A T E O F N E W Y O R K
________________________________________________________________________
7126--B
2023-2024 Regular Sessions
I N A S S E M B L Y
May 11, 2023
___________
Introduced by M. of A. McDONALD, SEAWRIGHT, LUNSFORD, STIRPE, TAYLOR,
BRABENEC, SLATER, BLUMENCRANZ, BRONSON, BICHOTTE HERMELYN, DAVILA --
Multi-Sponsored by -- M. of A. LEVENBERG -- read once and referred to
the Committee on Ways and Means -- recommitted to the Committee on
Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- recommitted to the Committee on Ways and Means in
accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the tax law, in relation to the eligibility criteria for
the digital gaming tax credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions (b) and (c) of section 45 of the tax law, as
added by section 1 of part OO of chapter 59 of the laws of 2022, are
amended to read as follows:
(b) Allocation of credit. The aggregate amount of tax credits allowed
under this section, subdivision fifty-five of section two hundred ten-B
and subsection (nnn) of section six hundred six of this chapter in any
taxable year shall be five million dollars. Such credit shall be allo-
cated by the department of economic development in order of priority
based upon the date of filing an application for allocation of digital
gaming media production credit with such office. AN APPLICANT SHALL
SUBMIT AN ANNUAL APPLICATION WHICH SHALL INCLUDE ALL QUALIFIED DIGITAL
GAMING MEDIA PRODUCTIONS FOR THE TAXABLE YEAR ALONG WITH AN ESTIMATE OF
THE DIGITAL GAMING MEDIA PRODUCTION COSTS. THE APPLICATION CAN BE
SUBMITTED NO EARLIER THAN NINETY DAYS PRIOR TO THE FIRST DAY OF THE
APPLICABLE TAXABLE YEAR. If the total amount of allocated credits
applied for in any particular year exceeds the aggregate amount of tax
credits allowed for such year under this section, such excess shall be
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11262-07-4
A. 7126--B 2
treated as having been applied for on the first day of the subsequent
taxable year.
(c) Definitions. As used in this section:
(1) "Qualified digital gaming media production" means: (i) a website,
the digital media production costs of which are paid or incurred predo-
minately in connection with (A) video simulation, animation, text,
audio, graphics or similar gaming related property embodied in digital
format, and (B) interactive features of digital gaming (e.g., links,
message boards, communities or content manipulation); (ii) video or
interactive games produced primarily for distribution over the internet,
wireless network or successors thereto; and (iii) animation, simulation
or embedded graphics digital gaming related software intended for
commercial distribution regardless of medium; provided, however, that
the qualified digital game development media productions described in
subparagraphs (i) through (iii) of this paragraph must have digital
media production costs equal to or in excess of [one hundred] FIFTY
thousand dollars per production. A qualified digital gaming media
production does not include a website, video, interactive game or soft-
ware that is used predominately for: electronic commerce (retail or
wholesale purposes other than the sale of video interactive games),
gambling (including activities regulated by a New York gaming agency),
or political advocacy purposes.
(2) "Digital gaming media production costs" means any costs for wages
[or salaries] paid to individuals, [other than actors or writers,]
directly employed for services performed by those individuals directly
[and predominantly] in the creation of a digital gaming media production
or productions. [Up to one hundred thousand dollars in wages and sala-
ries paid to such employees, other than actors and writers, directly
employed shall be used in the calculation of this credit.] Digital
gaming media production costs include but shall not be limited to
payments for services performed directly [and predominantly] in the
development (including concept creation), [design,] production (includ-
ing concept creation), design, production (including testing), editing
(including encoding) and compositing (including the integration of
digital files for interaction by end users) of digital gaming media.
Digital gaming media production costs shall not include expenses
incurred for the distribution, marketing, promotion, or advertising
content generated by end users, other costs not directly [and predomi-
nantly] related to the creation, production or modification of digital
gaming media or costs used by the taxpayer as a basis of the calculation
of any other tax credit allowed under this chapter. In addition, [sala-
ries or other income distribution] WAGES related to the creation of
digital gaming media for any person who PREDOMINATELY serves in A CORPO-
RATE CAPACITY IN the role of chief executive officer, chief financial
officer, president, treasurer or similar CORPORATE position AND WHO IS
NOT DIRECTLY ENGAGED IN SERVICES RELATED TO THE CREATION OF A DIGITAL
GAMING MEDIA PRODUCTION OR PRODUCTIONS shall not be included as digital
gaming media production costs if the digital gaming media production
entity has more then ten employees. [Salaries or other income] WAGES
PAID to a person serving in such a role for the digital gaming media
production entity shall also not be included if the person was employed
by a related person of the digital gaming media production entity within
sixty months of the date the digital gaming media production entity
applied for the tax credit certificate described in subdivision (d) of
this section. For purposes of the preceding sentence, a related person
shall have the same meaning as the term "related person" in section four
A. 7126--B 3
hundred sixty-five of the internal revenue code. [Furthermore, any
income or other distribution to any individual including, but not limit-
ed to, licensing or royalty fees, who holds an ownership interest in a
digital gaming media production entity, whether or not such individual
is serving in the role of chief executive officer, chief financial offi-
cer, president, treasurer or similar position for such an entity, shall
not be included as digital gaming media production costs. Up to four
million dollars in qualified digital gaming media production costs per
production shall be used in the calculation of this credit.] Digital
gaming media production costs shall not include those costs used by the
taxpayer or another taxpayer as the basis calculation of any other tax
credit allowed under this chapter.
(3) "Qualified digital gaming media production costs" means digital
gaming media production costs only to the extent such costs are attrib-
utable to the use of property or the performance of services by any
persons within the state directly [and predominantly] in the creation,
production or modification of digital gaming related media. [Such total
production costs incurred and paid in this state shall be equal to or
exceed seventy-five percent of total cost of an eligible production
incurred and paid within and without this state.]
(4) "Digital gaming media production entity" means a corporation,
partnership, limited partnership or other entity or individual engaged
in qualified digital game development media production.
§ 2. This act shall take effect immediately and shall apply to taxable
years beginning on and after January 1, 2024 and before January 1, 2028.