Bill Text: NY A05003 | 2023-2024 | General Assembly | Amended

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Bill Title: Extends and enhances the empire state film production credit and the empire state film post production credit.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2024-01-03 - referred to ways and means [A05003 Detail]

Download: New_York-2023-A05003-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         5003--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    February 27, 2023
                                       ___________

        Introduced  by M. of A. BARRETT, MAGNARELLI -- read once and referred to
          the Committee on Ways and Means -- committee discharged, bill amended,
          ordered reprinted as amended and recommitted to said committee

        AN ACT to amend the tax law,  in  relation  to  the  empire  state  film
          production credit and the empire state film post production credit

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1.  Paragraph 2 of subdivision (a) of section 24  of  the  tax
     2  law,  as  separately amended by sections 1 and 2 of part M of chapter 59
     3  of the laws of 2020, is amended to read as follows:
     4    (2) The amount of the credit shall be the product (or pro  rata  share
     5  of  the  product,  in the case of a member of a partnership) of [twenty-
     6  five] thirty percent, or thirty-five percent in the case of an  eligible
     7  relocated  television series, and the qualified production costs paid or
     8  incurred in the production of a qualified film, provided that:  (i)  the
     9  qualified  production  costs  (excluding  post production costs) paid or
    10  incurred which are attributable to the use of tangible property  or  the
    11  performance  of  services at a qualified film production facility in the
    12  production of such qualified film equal or exceed  seventy-five  percent
    13  of  the  production  costs  (excluding  post  production  costs) paid or
    14  incurred which are attributable to the use of tangible property  or  the
    15  performance of services at any film production facility within and with-
    16  out  the state in the production of such qualified film, and (ii) except
    17  with respect to a  qualified  independent  film  production  company  or
    18  pilot,  at least ten percent of the total principal photography shooting
    19  days spent in the production of such qualified film must be spent  at  a
    20  qualified film production facility. However, if the qualified production
    21  costs  (excluding  post  production costs) which are attributable to the
    22  use of tangible property or the performance of services at  a  qualified
    23  film  production  facility  in  the production of such qualified film is
    24  less than three million dollars,  then  the  portion  of  the  qualified

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09509-03-3
        A. 5003--A                          2

     1  production  costs  attributable  to  the use of tangible property or the
     2  performance of services in the production of such qualified film outside
     3  of a qualified film production facility shall be  allowed  only  if  the
     4  shooting days spent in New York outside of a film production facility in
     5  the  production  of  such  qualified  film  equal or exceed seventy-five
     6  percent of the total shooting days spent within  and  without  New  York
     7  outside  of  a film production facility in the production of such quali-
     8  fied film. The credit shall be allowed for the taxable year in which the
     9  production of such qualified film is completed. However, in the case  of
    10  a  qualified  film that receives funds from additional pool 2, no credit
    11  shall be claimed before the later of (1) the taxable year the production
    12  of the qualified film is complete,  or  (2)  the  [first]  taxable  year
    13  [beginning  immediately  after  the]  that  includes the last day of the
    14  allocation year for which the film has  been  allocated  credit  by  the
    15  governor's  office for motion picture and television development. If the
    16  amount of the credit is at least one million dollars but less than  five
    17  million  dollars,  the  credit  shall  be claimed over a two year period
    18  beginning in the first taxable year in which the credit may  be  claimed
    19  and  in the next succeeding taxable year, with one-half of the amount of
    20  credit allowed being claimed in each year. If the amount of  the  credit
    21  is  at  least  five  million dollars, the credit shall be claimed over a
    22  three year period beginning in the first taxable year in which the cred-
    23  it may be claimed and in the next two  succeeding  taxable  years,  with
    24  one-third  of  the  amount  of  the credit allowed being claimed in each
    25  year.
    26    § 2. Paragraph 5 of subdivision (a) of section 24 of the tax  law,  as
    27  amended  by  section  2  of part M of chapter 59 of the laws of 2022, is
    28  amended to read as follows:
    29    (5) For the period two thousand fifteen through two thousand  [twenty-
    30  nine]  thirty-four,  in  addition to the amount of credit established in
    31  paragraph two of this subdivision, a taxpayer shall be allowed a  credit
    32  equal to the product (or pro rata share of the product, in the case of a
    33  member  of  a  partnership)  of  ten percent and the [amount of wages or
    34  salaries paid to individuals directly employed (excluding those employed
    35  as  writers,  directors,  music  directors,  producers  and  performers,
    36  including  background actors with no scripted lines) by a qualified film
    37  production company or a qualified independent  film  production  company
    38  for  services performed by those individuals] qualified production costs
    39  paid or incurred in the production of the qualified film in one  of  the
    40  counties specified in this paragraph in connection with a qualified film
    41  with  a minimum budget of five hundred thousand dollars. For purposes of
    42  this additional credit,  the  [services  must  be  performed]  qualified
    43  production  costs paid or incurred must be in the production of a quali-
    44  fied film in one or more of the following  counties:  Albany,  Allegany,
    45  Broome,  Cattaraugus,  Cayuga,  Chautauqua,  Chemung, Chenango, Clinton,
    46  Columbia, Cortland, Delaware, Dutchess, Erie, Essex,  Franklin,  Fulton,
    47  Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madi-
    48  son,  Monroe,  Montgomery,  Niagara,  Oneida, Onondaga, Ontario, Orange,
    49  Orleans, Oswego,  Otsego,  Putnam,  Rensselaer,  Saratoga,  Schenectady,
    50  Schoharie,  Schuyler,  Seneca,  St.  Lawrence, Steuben, Sullivan, Tioga,
    51  Tompkins, Ulster, Warren, Washington, Wayne,  Wyoming,  or  Yates.  [The
    52  aggregate  amount  of  tax  credits allowed pursuant to the authority of
    53  this paragraph shall be five million dollars each year during the period
    54  two thousand fifteen through two  thousand  twenty-nine  of  the  annual
    55  allocation  made  available to the program pursuant to paragraph four of
    56  subdivision (e) of this section. Such aggregate amount of credits  shall
        A. 5003--A                          3

     1  be  allocated by the governor's office for motion picture and television
     2  development among taxpayers in order of priority based upon the date  of
     3  filing an application for allocation of film production credit with such
     4  office.  If the total amount of allocated credits applied for under this
     5  paragraph  in  any  year  exceeds  the  aggregate  amount of tax credits
     6  allowed for such year under this paragraph, such excess shall be treated
     7  as having been applied for on the first day of the  next  year.  If  the
     8  total  amount  of allocated tax credits applied for under this paragraph
     9  at the conclusion of any year is less than  five  million  dollars,  the
    10  remainder  shall be treated as part of the annual allocation made avail-
    11  able to the program pursuant to paragraph four  of  subdivision  (e)  of
    12  this  section.  However,  in no event may the total of the credits allo-
    13  cated under this paragraph and the  credits  allocated  under  paragraph
    14  five  of  subdivision  (a)  of section thirty-one of this article exceed
    15  five million dollars in any year during the period two thousand  fifteen
    16  through two thousand twenty-nine] The total amount of credit established
    17  pursuant  to  the  authority of this paragraph and paragraph two of this
    18  subdivision shall not exceed a credit equal to the product (or pro  rata
    19  share of the product, in the case of a member of a partnership) of forty
    20  percent  and  the  qualified  production  costs  paid or incurred in the
    21  production of the qualified film.
    22    § 2-a. Paragraph 1 of subdivision (b) of section 24 of the tax law, as
    23  amended by section 4 of part B of chapter 59 of the  laws  of  2013,  is
    24  amended to read as follows:
    25    (1)  "Qualified  production  costs" means production costs only to the
    26  extent such costs are attributable to the use of  tangible  property  or
    27  the  performance of services within the state directly and predominantly
    28  in the production (including pre-production and post  production)  of  a
    29  qualified  film.    The  aggregate   total eligible qualified production
    30  costs for producers, writers, directors, actors, and composers shall not
    31  exceed forty percent of the aggregate sum total of all  other  qualified
    32  production costs.
    33    §  3.  Paragraph 2 of subdivision (b) of section 24 of the tax law, as
    34  added by section 1 of part P of chapter 60  of  the  laws  of  2004,  is
    35  amended to read as follows:
    36    (2)  "Production costs" means any costs for tangible property used and
    37  services performed directly and predominantly in the production (includ-
    38  ing  pre-production  and  post  production)   of   a   qualified   film.
    39  "Production  costs"  shall  not include (i) costs for a story, script or
    40  scenario to be used for a qualified film and (ii) wages or  salaries  or
    41  other  compensation  for writers, directors, including [music directors]
    42  composers, producers and performers (other than background  actors  with
    43  no  scripted  lines)  to  the  extent  those  wages or salaries or other
    44  compensation  exceed  five  hundred  thousand  dollars  per  individual.
    45  "Production  costs"  generally  include  technical  and  crew production
    46  costs, such as expenditures for film production facilities, or any  part
    47  thereof, props, makeup, wardrobe, film processing, camera, sound record-
    48  ing, set construction, lighting, shooting, editing and meals.
    49    §  4.  Paragraph 8 of subdivision (b) of section 24 of the tax law, as
    50  added by section 2 of part B of chapter 59  of  the  laws  of  2013,  is
    51  amended to read as follows:
    52    (8)  "Relocated television production" shall mean, notwithstanding the
    53  limitations in subparagraph (i) of paragraph three of this  subdivision,
    54  a television production that is a talk or variety program that filmed at
    55  least  [five] two seasons outside the state prior to its first relocated
    56  season in New York, the episodes are filmed before a studio audience  of
        A. 5003--A                          4

     1  two  hundred or more, and the relocated television production incurs (i)
     2  at least thirty million dollars in annual production costs in the state,
     3  or (ii) at least ten million dollars in capital expenditures at a quali-
     4  fied production facility in the state.
     5    § 5. Subdivision (b) of section 24 of the tax law is amended by adding
     6  a new paragraph 9 to read as follows:
     7    (9)  "Eligible  relocated  television series" shall mean the first two
     8  years of a regularly occurring production intended to run in its initial
     9  broadcast, regardless of the medium or mode of its  distribution,  in  a
    10  series  of narrative and/or thematically related episodes, each of which
    11  has a running time of at least thirty minutes in  length  (inclusive  of
    12  commercial  advertisement and interstitial programming, if any). For the
    13  purposes of this definition only, a television series  produced  by  and
    14  for  media  services  providers  described  as streaming services and/or
    15  digital platforms (and excluding network/cable) shall mean  a  regularly
    16  occurring  production intended to run in its initial release in a series
    17  of narrative and/or thematically related episodes, the aggregate  length
    18  of  which  is at least seventy-five minutes, although the episodes them-
    19  selves may vary in  duration  from  the  thirty  minutes  specified  for
    20  network/cable  production,  which  had  filmed six episodes of the tele-
    21  vision series outside the state immediately prior to relocating  to  the
    22  state, where each episode of the  television series had a minimum budget
    23  of at least one million dollars.
    24    §  6.  Paragraph 4 of subdivision (e) of section 24 of the tax law, as
    25  amended by section 3 of part M of chapter 59 of the  laws  of  2022,  is
    26  amended to read as follows:
    27    (4) Additional pool 2 - The aggregate amount of tax credits allowed in
    28  subdivision (a) of this section shall be increased by an additional four
    29  hundred twenty million dollars in each year starting in two thousand ten
    30  through  two  thousand  [twenty-nine]  twenty-three  and  seven  hundred
    31  million dollars each year starting in two thousand  twenty-four  through
    32  two thousand thirty-four, provided however, seven million dollars of the
    33  annual  allocation  shall  be  available  for the empire state film post
    34  production credit pursuant to section thirty-one of this article in  two
    35  thousand thirteen and two thousand fourteen, twenty-five million dollars
    36  of  the  annual  allocation shall be available for the empire state film
    37  post production credit pursuant to section thirty-one of this article in
    38  each year starting in two thousand fifteen through two  thousand  [twen-
    39  ty-nine  and] twenty-three, and forty-five million dollars of the annual
    40  allocation shall be available for the empire state film post  production
    41  credit  pursuant  to  section  thirty-one  of  this article in each year
    42  starting in two thousand twenty-four through two  thousand  thirty-four.
    43  Provided further, five million dollars of the annual allocation shall be
    44  made available for the television writers' and directors' fees and sala-
    45  ries  credit  pursuant  to section twenty-four-b of this article in each
    46  year starting in two thousand twenty through two thousand  [twenty-nine]
    47  thirty-four. This amount shall be allocated by the governor's office for
    48  motion  picture and television development among taxpayers in accordance
    49  with subdivision (a) of this section. If the  commissioner  of  economic
    50  development  determines  that the aggregate amount of tax credits avail-
    51  able from additional pool 2 for the empire  state  film  production  tax
    52  credit  have  been previously allocated, and determines that the pending
    53  applications from eligible applicants for the  empire  state  film  post
    54  production  tax credit pursuant to section thirty-one of this article is
    55  insufficient to utilize the balance of  unallocated  empire  state  film
    56  post  production  tax  credits from such pool, the remainder, after such
        A. 5003--A                          5

     1  pending applications are considered, shall be made available  for  allo-
     2  cation  in  the  empire  state film tax credit pursuant to this section,
     3  subdivision twenty of section two hundred ten-B and subsection  (gg)  of
     4  section  six  hundred  six of this chapter. Also, if the commissioner of
     5  economic development determines that the aggregate amount of tax credits
     6  available from  additional  pool  2  for  the  empire  state  film  post
     7  production  tax  credit  have  been previously allocated, and determines
     8  that the pending applications from eligible applicants  for  the  empire
     9  state  film  production  tax credit pursuant to this section is insuffi-
    10  cient to utilize the balance of unallocated film production tax  credits
    11  from  such  pool,  then all or part of the remainder, after such pending
    12  applications are considered, shall be made available for allocation  for
    13  the  empire  state film post production credit pursuant to this section,
    14  subdivision thirty-two of section two hundred ten-B and subsection  (qq)
    15  of  section  six  hundred six of this chapter. The governor's office for
    16  motion picture and television development must notify taxpayers of their
    17  allocation year and include the allocation year on  the  certificate  of
    18  tax  credit.  Taxpayers eligible to claim a credit must report the allo-
    19  cation year directly on their empire state film  production  credit  tax
    20  form for each year a credit is claimed and include a copy of the certif-
    21  icate  with  their  tax  return.  In  the  case of a qualified film that
    22  receives funds from additional pool 2, no empire state  film  production
    23  credit  shall  be  claimed  before  the  later  of  the taxable year the
    24  production of the qualified film is complete, or the taxable year  imme-
    25  diately  following the allocation year for which the film has been allo-
    26  cated credit by the governor's office for motion picture and  television
    27  development.
    28    §  7.  Paragraph 4 of subdivision (e) of section 24 of the tax law, as
    29  amended by section 4 of part M of chapter 59 of the  laws  of  2022,  is
    30  amended to read as follows:
    31    (4) Additional pool 2 - The aggregate amount of tax credits allowed in
    32  subdivision (a) of this section shall be increased by an additional four
    33  hundred twenty million dollars in each year starting in two thousand ten
    34  through  two  thousand  [twenty-nine]  twenty-three  and  seven  hundred
    35  million dollars in  each  year  starting  in  two  thousand  twenty-four
    36  through  two  thousand  thirty-four,  provided  however,  seven  million
    37  dollars of the annual allocation shall be available for the empire state
    38  film post production credit pursuant to section thirty-one of this arti-
    39  cle in two thousand thirteen and two thousand  fourteen  [and],  twenty-
    40  five million dollars of the annual allocation shall be available for the
    41  empire  state film post production credit pursuant to section thirty-one
    42  of this article in each year starting in two  thousand  fifteen  through
    43  two  thousand [twenty-nine] twenty-three, and forty-five million dollars
    44  of the annual allocation shall be available for the  empire  state  film
    45  post production credit pursuant to section thirty-one of this article in
    46  each  year  starting  in  two  thousand twenty-four through two thousand
    47  thirty-four. This amount shall be allocated by the governor's office for
    48  motion picture and television development among taxpayers in  accordance
    49  with  subdivision  (a)  of this section. If the commissioner of economic
    50  development determines that the aggregate amount of tax  credits  avail-
    51  able  from  additional  pool  2 for the empire state film production tax
    52  credit have been previously allocated, and determines that  the  pending
    53  applications  from  eligible  applicants  for the empire state film post
    54  production tax credit pursuant to section thirty-one of this article  is
    55  insufficient  to  utilize  the  balance of unallocated empire state film
    56  post production tax credits from such pool, the  remainder,  after  such
        A. 5003--A                          6

     1  pending  applications  are considered, shall be made available for allo-
     2  cation in the empire state film tax credit  pursuant  to  this  section,
     3  subdivision  twenty  of section two hundred ten-B and subsection (gg) of
     4  section  six  hundred  six of this chapter. Also, if the commissioner of
     5  economic development determines that the aggregate amount of tax credits
     6  available from  additional  pool  2  for  the  empire  state  film  post
     7  production  tax  credit  have  been previously allocated, and determines
     8  that the pending applications from eligible applicants  for  the  empire
     9  state  film  production  tax credit pursuant to this section is insuffi-
    10  cient to utilize the balance of unallocated film production tax  credits
    11  from  such  pool,  then all or part of the remainder, after such pending
    12  applications are considered, shall be made available for allocation  for
    13  the  empire  state film post production credit pursuant to this section,
    14  subdivision thirty-two of section two hundred ten-B and subsection  (qq)
    15  of  section  six  hundred six of this chapter. The governor's office for
    16  motion picture and television development must notify taxpayers of their
    17  allocation year and include the allocation year on  the  certificate  of
    18  tax  credit.  Taxpayers eligible to claim a credit must report the allo-
    19  cation year directly on their empire state film  production  credit  tax
    20  form for each year a credit is claimed and include a copy of the certif-
    21  icate  with  their  tax  return.  In  the  case of a qualified film that
    22  receives funds from additional pool 2, no empire state  film  production
    23  credit  shall  be  claimed  before  the  later  of  the taxable year the
    24  production of the qualified film is complete, or the taxable year  imme-
    25  diately  following the allocation year for which the film has been allo-
    26  cated credit by the governor's office for motion picture and  television
    27  development.
    28    §  8.  Paragraph 2 of subdivision (a) of section 31 of the tax law, as
    29  amended by section 5 of part M of chapter 59 of the  laws  of  2020,  is
    30  amended to read as follows:
    31    (2)  The  amount of the credit shall be the product (or pro rata share
    32  of the product, in the case of a member of a  partnership)  of  [twenty-
    33  five] thirty percent and the qualified post production costs paid in the
    34  production  of  a qualified film at a qualified post production facility
    35  located within the  metropolitan  commuter  transportation  district  as
    36  defined  in  section  twelve hundred sixty-two of the public authorities
    37  law or [thirty] thirty-five percent and the  qualified  post  production
    38  costs  paid  in  the  production of a qualified film at a qualified post
    39  production facility located elsewhere in the state.
    40    § 9. Paragraph 6 of subdivision (a) of section 31 of the tax  law,  as
    41  amended  by  section  6  of part M of chapter 59 of the laws of 2022, is
    42  amended to read as follows:
    43    (6) For the period two thousand fifteen through two thousand  [twenty-
    44  nine]  thirty-four,  in  addition to the amount of credit established in
    45  paragraph two of this subdivision, a taxpayer shall be allowed a  credit
    46  equal to the product (or pro rata share of the product, in the case of a
    47  member  of  a  partnership)  of  ten percent and the [amount of wages or
    48  salaries paid to individuals directly employed (excluding those employed
    49  as  writers,  directors,  music  directors,  producers  and  performers,
    50  including  background  actors  with  no  scripted  lines)  for  services
    51  performed by those individuals] qualified post production costs paid  in
    52  the  production  of a qualified film with a minimum budget of five thou-
    53  sand dollars at a qualified post production facility located in  one  of
    54  the  counties  specified  in this paragraph [in connection with the post
    55  production work on a qualified  film  with  a  minimum  budget  of  five
    56  hundred  thousand dollars at a qualified post production facility in one
        A. 5003--A                          7

     1  of the counties listed in this paragraph]. For purposes  of  this  addi-
     2  tional  credit,  [the  services  must  be  performed] the qualified post
     3  production costs paid must be in the production of a qualified  film  in
     4  one  or more of the following counties: Albany, Allegany, Broome, Catta-
     5  raugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia,  Cort-
     6  land,  Delaware,  Dutchess,  Erie,  Essex,  Franklin,  Fulton,  Genesee,
     7  Greene,  Hamilton,  Herkimer,  Jefferson,  Lewis,  Livingston,  Madison,
     8  Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, Orange, Orleans,
     9  Oswego,  Otsego,  Putnam,  Rensselaer, Saratoga, Schenectady, Schoharie,
    10  Schuyler, Seneca, St.  Lawrence,  Steuben,  Sullivan,  Tioga,  Tompkins,
    11  Ulster,  Warren,  Washington,  Wayne,  Wyoming, or Yates. [The aggregate
    12  amount of tax credits allowed pursuant to the authority  of  this  para-
    13  graph  shall  be  five  million  dollars each year during the period two
    14  thousand fifteen through two thousand twenty-nine of  the  annual  allo-
    15  cation  made  available  to the empire state film post production credit
    16  pursuant to paragraph four of subdivision (e) of section twenty-four  of
    17  this article. Such aggregate amount of credits shall be allocated by the
    18  governor's  office  for  motion picture and television development among
    19  taxpayers in order of priority based upon the date of filing an applica-
    20  tion for allocation of post production credit with such office.  If  the
    21  total  amount  of  allocated credits applied for under this paragraph in
    22  any year exceeds the aggregate amount of tax credits  allowed  for  such
    23  year  under  this paragraph, such excess shall be treated as having been
    24  applied for on the first day of the next year. If the  total  amount  of
    25  allocated tax credits applied for under this paragraph at the conclusion
    26  of  any  year  is less than five million dollars, the remainder shall be
    27  treated as part of the annual allocation for two thousand seventeen made
    28  available to the empire state film post production  credit  pursuant  to
    29  paragraph  four  of subdivision (e) of section twenty-four of this arti-
    30  cle. However, in no event may the total of the credits  allocated  under
    31  this  paragraph and the credits allocated under paragraph five of subdi-
    32  vision (a) of section twenty-four of this article  exceed  five  million
    33  dollars  in  any year during the period two thousand fifteen through two
    34  thousand twenty-nine.]
    35    § 10. This act shall take effect immediately for new initial  applica-
    36  tions  received on or after such effective date; provided, however, that
    37  the amendments to paragraph 4 of subdivision (e) of section  24  of  the
    38  tax  law  made  by section six of this act shall take effect on the same
    39  date and in the same manner as section 6 of chapter 683 of the  laws  of
    40  2019, as amended, takes effect.