Bill Text: NY A07126 | 2023-2024 | General Assembly | Amended
Bill Title: Amends the eligibility criteria for game development companies by changing the yearly timeframe structure, lowering the dollar threshold per production, and removing the in-state cost incurred threshold to accurately fit current digital gaming industry models.
Spectrum: Slight Partisan Bill (Democrat 9-4)
Status: (Introduced) 2024-05-17 - print number 7126b [A07126 Detail]
Download: New_York-2023-A07126-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 7126--B 2023-2024 Regular Sessions IN ASSEMBLY May 11, 2023 ___________ Introduced by M. of A. McDONALD, SEAWRIGHT, LUNSFORD, STIRPE, TAYLOR, BRABENEC, SLATER, BLUMENCRANZ, BRONSON, BICHOTTE HERMELYN, DAVILA -- Multi-Sponsored by -- M. of A. LEVENBERG -- read once and referred to the Committee on Ways and Means -- recommitted to the Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee 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: 1 Section 1. Subdivisions (b) and (c) of section 45 of the tax law, as 2 added by section 1 of part OO of chapter 59 of the laws of 2022, are 3 amended to read as follows: 4 (b) Allocation of credit. The aggregate amount of tax credits allowed 5 under this section, subdivision fifty-five of section two hundred ten-B 6 and subsection (nnn) of section six hundred six of this chapter in any 7 taxable year shall be five million dollars. Such credit shall be allo- 8 cated by the department of economic development in order of priority 9 based upon the date of filing an application for allocation of digital 10 gaming media production credit with such office. An applicant shall 11 submit an annual application which shall include all qualified digital 12 gaming media productions for the taxable year along with an estimate of 13 the digital gaming media production costs. The application can be 14 submitted no earlier than ninety days prior to the first day of the 15 applicable taxable year. If the total amount of allocated credits 16 applied for in any particular year exceeds the aggregate amount of tax 17 credits allowed for such year under this section, such excess shall be EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11262-07-4A. 7126--B 2 1 treated as having been applied for on the first day of the subsequent 2 taxable year. 3 (c) Definitions. As used in this section: 4 (1) "Qualified digital gaming media production" means: (i) a website, 5 the digital media production costs of which are paid or incurred predo- 6 minately in connection with (A) video simulation, animation, text, 7 audio, graphics or similar gaming related property embodied in digital 8 format, and (B) interactive features of digital gaming (e.g., links, 9 message boards, communities or content manipulation); (ii) video or 10 interactive games produced primarily for distribution over the internet, 11 wireless network or successors thereto; and (iii) animation, simulation 12 or embedded graphics digital gaming related software intended for 13 commercial distribution regardless of medium; provided, however, that 14 the qualified digital game development media productions described in 15 subparagraphs (i) through (iii) of this paragraph must have digital 16 media production costs equal to or in excess of [one hundred] fifty 17 thousand dollars per production. A qualified digital gaming media 18 production does not include a website, video, interactive game or soft- 19 ware that is used predominately for: electronic commerce (retail or 20 wholesale purposes other than the sale of video interactive games), 21 gambling (including activities regulated by a New York gaming agency), 22 or political advocacy purposes. 23 (2) "Digital gaming media production costs" means any costs for wages 24 [or salaries] paid to individuals, [other than actors or writers,] 25 directly employed for services performed by those individuals directly 26 [and predominantly] in the creation of a digital gaming media production 27 or productions. [Up to one hundred thousand dollars in wages and sala-28ries paid to such employees, other than actors and writers, directly29employed shall be used in the calculation of this credit.] Digital 30 gaming media production costs include but shall not be limited to 31 payments for services performed directly [and predominantly] in the 32 development (including concept creation), [design,] production (includ- 33 ing concept creation), design, production (including testing), editing 34 (including encoding) and compositing (including the integration of 35 digital files for interaction by end users) of digital gaming media. 36 Digital gaming media production costs shall not include expenses 37 incurred for the distribution, marketing, promotion, or advertising 38 content generated by end users, other costs not directly [and predomi-39nantly] related to the creation, production or modification of digital 40 gaming media or costs used by the taxpayer as a basis of the calculation 41 of any other tax credit allowed under this chapter. In addition, [sala-42ries or other income distribution] wages related to the creation of 43 digital gaming media for any person who predominately serves in a corpo- 44 rate capacity in the role of chief executive officer, chief financial 45 officer, president, treasurer or similar corporate position and who is 46 not directly engaged in services related to the creation of a digital 47 gaming media production or productions shall not be included as digital 48 gaming media production costs if the digital gaming media production 49 entity has more then ten employees. [Salaries or other income] Wages 50 paid to a person serving in such a role for the digital gaming media 51 production entity shall also not be included if the person was employed 52 by a related person of the digital gaming media production entity within 53 sixty months of the date the digital gaming media production entity 54 applied for the tax credit certificate described in subdivision (d) of 55 this section. For purposes of the preceding sentence, a related person 56 shall have the same meaning as the term "related person" in section fourA. 7126--B 3 1 hundred sixty-five of the internal revenue code. [Furthermore, any2income or other distribution to any individual including, but not limit-3ed to, licensing or royalty fees, who holds an ownership interest in a4digital gaming media production entity, whether or not such individual5is serving in the role of chief executive officer, chief financial offi-6cer, president, treasurer or similar position for such an entity, shall7not be included as digital gaming media production costs. Up to four8million dollars in qualified digital gaming media production costs per9production shall be used in the calculation of this credit.] Digital 10 gaming media production costs shall not include those costs used by the 11 taxpayer or another taxpayer as the basis calculation of any other tax 12 credit allowed under this chapter. 13 (3) "Qualified digital gaming media production costs" means digital 14 gaming media production costs only to the extent such costs are attrib- 15 utable to the use of property or the performance of services by any 16 persons within the state directly [and predominantly] in the creation, 17 production or modification of digital gaming related media. [Such total18production costs incurred and paid in this state shall be equal to or19exceed seventy-five percent of total cost of an eligible production20incurred and paid within and without this state.] 21 (4) "Digital gaming media production entity" means a corporation, 22 partnership, limited partnership or other entity or individual engaged 23 in qualified digital game development media production. 24 § 2. This act shall take effect immediately and shall apply to taxable 25 years beginning on and after January 1, 2024 and before January 1, 2028.