S T A T E O F N E W Y O R K ________________________________________________________________________ 1465 2015-2016 Regular Sessions I N A S S E M B L Y January 12, 2015 ___________ Introduced by M. of A. LENTOL -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to the creation of the empire state music production credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The tax law is amended by adding a new section 42 to read 2 as follows: 3 S 42. EMPIRE STATE MUSIC PRODUCTION CREDIT. (A)(1) ALLOWANCE OF CRED- 4 IT. A TAXPAYER WHICH IS A QUALIFIED MUSIC PRODUCTION COMPANY, OR A QUAL- 5 IFIED INDEPENDENT MUSIC PRODUCTION COMPANY, OR WHICH IS A SOLE PROPRIE- 6 TOR OF OR A MEMBER OF A PARTNERSHIP WHICH IS A QUALIFIED MUSIC 7 PRODUCTION COMPANY OR A QUALIFIED INDEPENDENT MUSIC PRODUCTION COMPANY, 8 AND WHICH IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF THIS 9 CHAPTER, SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX. 10 (2) THE AMOUNT OF THE CREDIT SHALL BE THE PRODUCT (OR PRO RATA SHARE 11 OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNERSHIP) OF TWENTY 12 PERCENT AND THE QUALIFIED PRODUCTION COSTS PAID OR INCURRED IN THE 13 PRODUCTION OF MUSIC BY THE TAXPAYER. SUCH COSTS SHALL INCLUDE: RECORDING 14 PRODUCTION COSTS, ARTISTS' ROYALTIES, MUSICIAN SESSION FEES, GRAPHICS, 15 DIGITAL SCANNING, PROGRAMMING AND TESTING, PRODUCTION COSTS FOR MUSIC 16 VIDEOS MADE IN NEW YORK STATE AND DIRECT MARKETING EXPENDITURES INCLUD- 17 ING CONSULTANT FEES AND COSTS TO LAUNCH THE RECORDING. COSTS SHALL NOT 18 INCLUDE TOURING, PERFORMING, MANUFACTURING AND DISTRIBUTION COSTS. 19 (3) NO QUALIFIED PRODUCTION COSTS USED BY A TAXPAYER AS THE BASIS FOR 20 THE ALLOWANCE OF THE CREDIT PROVIDED FOR UNDER THIS SECTION SHALL BE 21 USED BY SUCH TAXPAYER TO CLAIM ANY OTHER CREDIT ALLOWED PURSUANT TO THIS 22 CHAPTER. 23 (B) ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED 24 UNDER THIS SECTION, SUBDIVISION FIFTY OF SECTION TWO HUNDRED TEN-B AND 25 SUBSECTION (CCC) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER IN ANY EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01211-01-5 A. 1465 2 1 CALENDAR YEAR SHALL BE SIXTY MILLION DOLLARS. SUCH AGGREGATE AMOUNT OF 2 CREDITS SHALL BE ALLOCATED BY THE EMPIRE STATE DEVELOPMENT CORPORATION 3 AMONG TAXPAYERS IN ORDER OF PRIORITY BASED UPON THE DATE OF FILING AN 4 APPLICATION FOR ALLOCATION OF MUSIC PRODUCTION CREDIT WITH SUCH OFFICE. 5 IF THE TOTAL AMOUNT OF ALLOCATED CREDITS APPLIED FOR IN ANY PARTICULAR 6 YEAR EXCEEDS THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH YEAR 7 UNDER THIS SECTION, SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED 8 FOR ON THE FIRST DAY OF THE SUBSEQUENT YEAR. 9 (C) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN 10 THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER: 11 (1) ARTICLE 9-A: SECTION 210-B: SUBDIVISION 50 12 (2) ARTICLE 22: SECTION 606: SUBSECTION (CCC) 13 S 2. Section 210-B of the tax law is amended by adding a new subdivi- 14 sion 50 to read as follows: 15 50. EMPIRE STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A 16 TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-TWO OF THIS CHAPTER 17 SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION 18 FORTY-TWO AGAINST THE TAX IMPOSED BY THIS ARTICLE. 19 (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION 20 FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS 21 THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF 22 SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE 23 AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE 24 YEAR REDUCES THE TAX TO SUCH AMOUNT, THE EXCESS SHALL BE TREATED AS AN 25 OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE 26 PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED, 27 HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT- 28 Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER- 29 EON. 30 S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 31 of the tax law is amended by adding a new clause (xli) to read as 32 follows: 33 (XLI) EMPIRE STATE MUSIC AMOUNT OF CREDIT FOR 34 PRODUCTION CREDIT UNDER QUALIFIED PRODUCTION CREDIT 35 SUBSECTION (CCC) MUSIC UNDER SUBDIVISION 36 FIFTY OF SECTION TWO 37 HUNDRED TEN-B 38 S 4. Section 606 of the tax law is amended by adding a new subsection 39 (ccc) to read as follows: 40 (CCC) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A 41 TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-TWO OF THIS CHAPTER 42 SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION 43 FORTY-TWO AGAINST THE TAX IMPOSED BY THIS ARTICLE. 44 (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER 45 THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH 46 YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT- 47 ED OR REFUNDED AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS 48 ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. 49 S 5. The empire state development corporation shall report, to the 50 governor and the legislature, its findings, conclusions and recommenda- 51 tions on or before one year from the date this act shall become a law, 52 and shall submit with its report such legislative proposals as it deems 53 necessary to implement its recommendations. 54 S 6. This act shall take effect on the one hundred eightieth day after 55 it shall have become a law.