S T A T E O F N E W Y O R K
________________________________________________________________________
6997--A
2023-2024 Regular Sessions
I N S E N A T E
May 16, 2023
___________
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Budget and Revenue --
recommitted to the Committee on Budget and Revenue in accordance with
Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
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. Paragraph 1 of subdivision (a) and subdivision (b) and (c)
of section 45 of the tax law, as added by section 1 of part OO of chap-
ter 59 of the laws of 2022, are amended to read as follows:
(1) A taxpayer which is a digital gaming media production entity
engaged in qualified digital gaming media production, or who is a sole
proprietor of or a member of a partnership, which is a digital gaming
media production entity engaged in qualified digital gaming media
production, and is subject to tax under article nine-A or twenty-two of
this chapter, shall be allowed a credit against such tax to be computed
as provided herein for taxable years beginning on or after January
first, two thousand twenty-three and before January first, two thousand
[twenty-eight] THIRTY.
(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] ONE HUNDRED million dollars. Such credit
shall be allocated 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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11262-03-4
S. 6997--A 2
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
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
S. 6997--A 3
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
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. Paragraph (a) of subdivision 55 of section 210-b of the tax law,
as added by section 2 of part OO of chapter 59 of the laws of 2022, is
amended to read as follows:
(a) Allowance of credit. A taxpayer who is eligible pursuant to
section forty-five of this chapter shall be allowed a credit to be
computed as provided in such section forty-five against the tax imposed
by this article. [Under no circumstances may a single taxpayer receive
more than one million five hundred thousand dollars in tax credits per
year.]
§ 3. Paragraph 1 of subsection (nnn) of section 606 of the tax law, as
added by section 4 of part OO of chapter 59 of the laws of 2022, is
amended to read as follows:
(1) Allowance of credit. A taxpayer who is eligible pursuant to
section forty-five of this chapter shall be allowed a credit to be
computed as provided in such section forty-five against the tax imposed
by this article. [Under no circumstances may a single taxpayer receive
more than one million five hundred thousand dollars in tax credits per
year.]
§ 4. This act shall take effect immediately and shall apply to taxable
years beginning on and after January 1, 2023 and before January 1, 2030.
