§ 45. Empire state digital gaming media production credit. (a)
Allowance of credit. (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.

(2) The amount of the credit shall be the product (or pro rata share
of the product, in the case of a taxpayer who is a partner in a
partnership, member of a limited liability company or shareholder in a
subchapter S corporation) of twenty-five percent and the qualified
digital gaming media production costs of one or more qualified digital
gaming media productions.

(3) Qualified digital gaming media production costs for a qualified
digital gaming media production incurred and paid in this state but
outside such metropolitan commuter transportation district as defined in
section twelve hundred sixty-two of the public authorities law shall be
eligible for a credit of ten percent of such eligible production costs
in addition to the credit specified in paragraph two of this
subdivision.

(4) All applicants to this program are required, as a condition of
receiving the credit, to include in the credits of each digital game
development media production language and a logo to be provided by the
governor's office of motion picture and television development
acknowledging the state's role in the creation of the production.

(5) A qualified digital gaming media production that has applied for
credit under the provisions of this section shall, as a condition for
the granting of the credit, file a diversity plan with the department of
economic development outlining specific goals for hiring a diverse
workforce. The commissioner of economic development shall promulgate
regulations implementing the requirements of this paragraph, which,
notwithstanding any provisions to the contrary in the state
administrative procedure act, may be adopted on an emergency basis, to
ensure compliance with the provisions of this paragraph. The department
of economic development shall review each submitted plan as to whether
it meets the requirements established by the commissioner of economic
development, and shall verify that the applicant has met or made
good-faith efforts in achieving these goals.

(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
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. 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. Provided, however, that for
taxable years beginning on or after January first, two thousand
twenty-three, if the total amount of allocated credits applied for in
any particular year is less than the aggregate amount of tax credits
allowed for such year under this section, any unused portion may be
carried over and added to the aggregate amount of credits allowed in the
next succeeding taxable year or years.

(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
predominately 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 fifty thousand dollars
per production. A qualified digital gaming media production does not
include a website, video, interactive game or software 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 two hundred thousand dollars in wages and salaries
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 and prototype creation), design (including narrative
direction and sound design), production (including testing and
encoding), editing (including bug fixing) 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
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, wages related
to the creation of digital gaming media for any person who predominantly
serves in a corporate capacity in the role of chief executive officer,
chief financial officer, president, treasurer or similar corporate
position shall not be included as digital gaming media production costs
if the digital gaming media production entity has more than ten
employees. 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 hundred sixty-five of the internal revenue code.
Furthermore, any income or other distribution to any individual
including, but not limited 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 officer, president, treasurer or similar
position for such an entity, shall not be included as digital gaming
media production costs. Up to five 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
attributable 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 fifty-one 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.

(d) To be eligible for the empire state digital gaming media
production credit, the taxpayer shall have been issued a certificate of
tax credit by the department of economic development, which certificate
shall set forth the amount of the credit that may be claimed and the
taxable year in which it shall be claimed. The taxpayer shall be allowed
to claim only the amount listed on the certificate of tax credit for
that taxable year. In order to properly administer this credit, the
department shall be allowed to exchange information with the department
of economic development about the taxpayers claiming this credit,
including information about the tax credits claimed. A taxpayer that is
a partner in a partnership, member of a limited liability company or
shareholder in a subchapter S corporation that has received a
certificate of tax credit shall be allowed its pro rata share of the
credit earned by the partnership, limited liability company or
subchapter S corporation. The taxpayer shall claim the tax credit in the
taxable year that begins in the year for which it is allocated credit
under this section.

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

(1) Article nine-A: section two hundred ten-B, subdivision fifty-five.

(2) Article twenty-two: section six hundred six, subsection (i),
paragraph one, subparagraph (B), clause (xlvi).

(3) Article twenty-two: section six hundred six, subsection (nnn).