Legislation

Search OpenLegislation Statutes
This entry was published on 2019-04-19
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
SECTION 28
Empire state commercial production credit
Tax (TAX) CHAPTER 60, ARTICLE 1
* § 28. Empire state commercial production credit. (a) Allowance of
credit. (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 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 twenty-four.

(2) The state has annually seven million dollars in total tax credits
to disburse to all eligible commercial production companies. The seven
million dollars in total tax credits shall be allocated according to
subparagraphs (i) and (ii) of this paragraph:

(i) The state annually will disburse four million of the total seven
million in tax credits to all eligible production companies who film or
record qualified commercials 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 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 tangible 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 five hundred thousand dollars in the
aggregate during the calendar year. Such credit will be applied to
qualified production costs exceeding five hundred thousand dollars in a
calendar year.

(ii) 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 commuter
transportation district as defined in section twelve hundred sixty-two
of the public authorities law; provided, however, that if, after July
thirty-first 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, tax credits remain
unallocated under this subparagraph, those credits shall be allotted to
the credits set forth in subparagraph (i) of this paragraph 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 thirty 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 tangible 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
one hundred thousand dollars in the aggregate during the calendar year.
Such credit will be applied to all qualified production costs in a
calendar year.

(3) No qualified 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.

(4) Notwithstanding any provisions of this section to the contrary, a
corporation or partnership, which otherwise qualifies as a qualified
commercial production company, and is similar in operation and in
ownership to a business entity or entities taxable, or previously
taxable, under section one hundred eighty-three or one hundred
eighty-four or former section one hundred eighty-five of article nine;
article nine-A 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
which would have been subject to tax under article thirty-two of this
chapter (as such article was in effect on December thirty-first, two
thousand fourteen) 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 subparagraph
one of paragraph (o) of subdivision nine of section two hundred eight of
this chapter and was formed solely to gain empire state commercial
production credit benefits.

(b) Definitions. As used in this section, the following terms shall
have the following meanings:

(1) "Qualified production costs" means production costs only to the
extent such costs are attributable to the use of tangible property or
the performance of services within the state directly and predominantly
in the production (including pre-production and post-production) of a
qualified commercial.

(2) "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 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 salaries 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
musicians). "Production costs" generally include technical and crew
production costs, such as expenditures for commercial production
facilities and/or location costs, or any part thereof, film, audiotape,
videotape 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 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 costs" shall not include the editing of previously produced
content for a qualified commercial.

(3) "Qualified commercial" means an advertisement of any length that
is recorded on film, audiotape, videotape or digital medium in New York
for multi-market distribution by way of radio, television networks,
cable, satellite, motion picture theaters or internet. "Qualified
commercial" shall not include (i) news or current affairs program,
interview or talk program, network promos, i.e., commercials promoting
television series or movies, "how-to" (i.e., instructional) commercial
or program, commercial or program consisting entirely of stock footage,
trailers promoting theatrical films, sporting event or sporting program,
game show, award ceremony, daytime drama (i.e., daytime "soap opera"),
or "reality" program, or (ii) a production for which records are
required under section 2257 of title 18, United States code, to be
maintained with respect to any performer in such production (reporting
of books, commercials, etc. with respect to sexually explicit conduct).

(4) "Qualified commercial production company" is a corporation,
partnership, limited partnership, or other entity or individual which or
who is principally engaged in the production of a qualified commercial
and controls the production of the qualified commercial and is not the
distributor, or the contracting entity for production of such
commercial, nor is a variable interest entity of such distributor or
contracting entity.

(c) The department of economic development shall submit, on or before
December first of each year, to the governor, the director of the
division of the budget, the temporary president of the senate, and the
speaker of the assembly an annual report including, but not limited to,
the following information regarding the previous calendar year:

(1) the total dollar amount of credits allocated, the name and address
of each qualified commercial production company allocated credits under
this section, the total amount of credits allocated to each qualified
commercial production company, the total amount of qualified production
costs and production costs for each qualified commercial production
company, and the estimated number of employees, credit-eligible man
hours, and credit-eligible wages associated with each qualified
commercial production company allocated credits under this section;

(2) for qualified commercial production companies that were allocated
credit pursuant to subparagraph (i) of paragraph two of subdivision (a)
of this section: the name and address of each qualified commercial
production company, the total dollar amount of credits allocated, the
total amount of credits allocated to each qualified commercial
production company, total qualified production costs and production
costs for each qualified production company, and the estimated number of
employees, credit-eligible man hours, and credit-eligible wages
associated with each qualified commercial production company that filmed
or recorded a qualified commercial within the district;

(3) for qualified commercial production companies that were allocated
credit pursuant to subparagraph (ii) of paragraph two of subdivision (a)
of this section: the name and address of each qualified commercial
production company, the total dollar amount of credits allocated, the
total amount of credits allocated to each qualified commercial
production company, total qualified production costs and production
costs for each qualified production company, and the estimated number of
employees, credit-eligible man hours, and credit-eligible wages
associated with each qualified commercial production company that filmed
or recorded a qualified commercial outside the district; and

(4) the amount of credits reallocated to all eligible qualified
commercial production companies pursuant to subparagraph (ii) of
paragraph two of subdivision (a) of this section.

(5) The report may also include any recommendations for changes in the
calculation or administration of the credit, recommendations regarding
continuing modification or repeal of this credit, and any other
information regarding this credit as may be useful and appropriate.

(d) Cross-references. For application of the credit provided for in
this section, see the following provision of this chapter:

(1) article 9-A: section 210-B: subdivision 23.

(2) article 22: section 606: subsection (jj).

* NB There are 2 § 28's