Bill Text: NY A07182 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to the empire state film production tax credit; adds qualified converted industrial space film production companies to the companies authorized to receive an empire state film production tax credit; defines terms.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2018-01-03 - referred to ways and means [A07182 Detail]
Download: New_York-2017-A07182-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7182 2017-2018 Regular Sessions IN ASSEMBLY April 12, 2017 ___________ 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 empire state film production tax credit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 1 of subdivision (a) of section 24 of the tax 2 law, as amended by section 3 of part Q of chapter 57 of the laws of 3 2010, is amended to read as follows: 4 (1) Allowance of credit. A taxpayer which is a qualified film 5 production company, [or] a qualified independent film production compa- 6 ny, or a qualified converted industrial space film production company or 7 which is a sole proprietor of or a member of a partnership which is a 8 qualified film production company [or], a qualified independent film 9 production company, or a qualified converted industrial space film 10 production company, and which is subject to tax under articles nine-A or 11 twenty-two of this chapter, shall be allowed a credit against such tax, 12 pursuant to the provisions referenced in subdivision (c) of this 13 section, to be computed as hereinafter provided. 14 § 2. Paragraph 2 of subdivision (a) of section 24 of the tax law, as 15 amended by section 4 of part Q of chapter 57 of the laws of 2010, is 16 amended to read as follows: 17 (2) The amount of the credit shall be the product (or pro rata share 18 of the product, in the case of a member of a partnership) of thirty 19 percent and the qualified production costs paid or incurred in the 20 production of a qualified film, provided that, except with respect to a 21 qualified converted industrial film production company: (i) the quali- 22 fied production costs (excluding post production costs) paid or incurred 23 which are attributable to the use of tangible property or the perform- 24 ance of services at a qualified film production facility in the 25 production of such qualified film equal or exceed seventy-five percent EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10849-01-7A. 7182 2 1 of the production costs (excluding post production costs) paid or 2 incurred which are attributable to the use of tangible property or the 3 performance of services at any film production facility within and with- 4 out the state in the production of such qualified film, and (ii) except 5 with respect to a qualified independent film production company or 6 pilot, at least ten percent of the total principal photography shooting 7 days spent in the production of such qualified film must be spent at a 8 qualified film production facility. However, except with respect to a 9 qualified converted industrial film production company, if the qualified 10 production costs (excluding post production costs) which are attribut- 11 able to the use of tangible property or the performance of services at a 12 qualified film production facility in the production of such qualified 13 film is less than three million dollars, then the portion of the quali- 14 fied production costs attributable to the use of tangible property or 15 the performance of services in the production of such qualified film 16 outside of a qualified film production facility shall be allowed only if 17 the shooting days spent in New York outside of a film production facili- 18 ty in the production of such qualified film equal or exceed seventy-five 19 percent of the total shooting days spent within and without New York 20 outside of a film production facility in the production of such quali- 21 fied film. In the case of a qualified converted industrial film 22 production company the sole criterion shall be that the company paid or 23 incurred at least fifty thousand dollars of qualified converted indus- 24 trial space expenses (excluding post production costs) to produce a 25 qualified film, and that the qualified converted industrial space 26 expenses equal or exceed thirty-four percent of the total production 27 costs (excluding post production costs) paid or incurred within and 28 without the state in the production of such qualified film. The credit 29 shall be allowed for the taxable year in which the production of such 30 qualified film is completed, except that with respect to a qualified 31 converted industrial film production company having incurred at least 32 fifty thousand dollars of qualified converted industrial space expenses 33 with respect to a qualified film, such company may apply for the credit 34 using an interim application notwithstanding that the qualified film is 35 not yet completed. However, in the case of a qualified film that 36 receives funds from additional pool 2, no credit shall be claimed before 37 the later of (1) the taxable year the production of the qualified film 38 is complete, or (2) the taxable year immediately following the allo- 39 cation year for which the film has been allocated credit by the gover- 40 nor's office for motion picture and television development. In the case 41 of a qualified converted industrial space film production company, a 42 qualified film shall be deemed to be complete in the taxable year in 43 which the qualified film is actually completed, or the taxable year in 44 which an interim application is properly filed under this section in 45 respect of such qualified film. If the amount of the credit claimed by a 46 taxpayer other than a qualified converted industrial space film 47 production company is at least one million dollars but less than five 48 million dollars, the credit shall be claimed over a two year period 49 beginning in the first taxable year in which the credit may be claimed 50 and in the next succeeding taxable year, with one-half of the amount of 51 credit allowed being claimed in each year. If the amount of the credit 52 claimed by a taxpayer other than a qualified industrial space film 53 production company is at least five million dollars, the credit shall be 54 claimed over a three year period beginning in the first taxable year in 55 which the credit may be claimed and in the next two succeeding taxableA. 7182 3 1 years, with one-third of the amount of the credit allowed being claimed 2 in each year. 3 § 3. Paragraph 3 of subdivision (a) of section 24 of the tax law, as 4 added by section 1 of part P of chapter 60 of the laws of 2004, is 5 amended to read as follows: 6 (3) No qualified production costs used by a taxpayer either as the 7 basis for the allowance of the credit provided for under this section or 8 used in the calculation of the credit provided for under this section 9 shall be used by such taxpayer to claim any other credit allowed pursu- 10 ant to this chapter. If any taxpayer claims or previously claimed the 11 benefit of any credit under this section other than with respect to a 12 qualified film produced by a qualified converted industrial space film 13 production company at a qualified converted industrial space film 14 production facility, the taxpayer shall not be entitled to claim credits 15 with respect to qualifying converted industrial space expenses under the 16 rules applicable to qualified converted industrial space film production 17 companies. 18 § 4. Paragraph 4 of subdivision (a) of section 24 of the tax law, as 19 added by section 5 of part Q of chapter 57 of the laws of 2010, is 20 amended to read as follows: 21 (4) Notwithstanding the foregoing provisions of this subdivision, a 22 qualified film production company [or], a qualified independent film 23 production company, or a qualified converted industrial space film 24 production company, that has applied for credit under the provisions of 25 this section, agrees as a condition for the granting of the credit: (i) 26 to include in each qualified film distributed by DVD, or other media for 27 the secondary market, a New York promotional video approved by the 28 governor's office of motion picture and television development or to 29 include in the end credits of each qualified film "Filmed With the 30 Support of the New York State Governor's Office of Motion Picture and 31 Television Development" and a logo provided by the governor's office of 32 motion picture and television development, and (ii) to certify that it 33 will purchase taxable tangible property and services, defined as quali- 34 fied production costs pursuant to paragraph one of subdivision (b) of 35 this section, only from companies registered to collect and remit state 36 and local sales and use taxes pursuant to articles twenty-eight and 37 twenty-nine of this chapter. 38 § 5. Paragraph 5 of subdivision (a) of section 24 of the tax law, as 39 amended by chapter 420 of the laws of 2016, is amended to read as 40 follows: 41 (5) For the period two thousand fifteen through two thousand nineteen, 42 in addition to the amount of credit established in paragraph two of this 43 subdivision, a taxpayer shall be allowed a credit equal to the product 44 (or pro rata share of the product, in the case of a member of a partner- 45 ship) of ten percent and the amount of wages or salaries paid to indi- 46 viduals directly employed (excluding those employed as writers, direc- 47 tors, music directors, producers and performers, including background 48 actors with no scripted lines) by a qualified film production company 49 [or], a qualified independent film production company, or a qualified 50 converted industrial space film production company for services 51 performed by those individuals in one of the counties specified in this 52 paragraph in connection with a qualified film with a minimum budget of 53 five hundred thousand dollars. For purposes of this additional credit, 54 the services must be performed in one or more of the following counties: 55 Albany, Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, 56 Chenango, Clinton, Columbia, Cortland, Delaware, Dutchess, Erie, Essex,A. 7182 4 1 Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, 2 Livingston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, 3 Ontario, Orange, Orleans, Oswego, Otsego, Putnam, Rensselaer, Saratoga, 4 Schenectady, Schoharie, Schuyler, Seneca, St. Lawrence, Steuben, 5 Suffolk, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, 6 Wyoming, or Yates. The aggregate amount of tax credits allowed pursuant 7 to the authority of this paragraph shall be five million dollars each 8 year during the period two thousand fifteen through two thousand nine- 9 teen of the annual allocation made available to the program pursuant to 10 paragraph four of subdivision (e) of this section. Such aggregate amount 11 of credits shall be allocated by the governor's office for motion 12 picture and television development among taxpayers in order of priority 13 based upon the date of filing an application for allocation of film 14 production credit with such office. If the total amount of allocated 15 credits applied for under this paragraph in any year exceeds the aggre- 16 gate amount of tax credits allowed for such year under this paragraph, 17 such excess shall be treated as having been applied for on the first day 18 of the next year. If the total amount of allocated tax credits applied 19 for under this paragraph at the conclusion of any year is less than five 20 million dollars, the remainder shall be treated as part of the annual 21 allocation made available to the program pursuant to paragraph four of 22 subdivision (e) of this section. However, in no event may the total of 23 the credits allocated under this paragraph and the credits allocated 24 under paragraph five of subdivision (a) of section thirty-one of this 25 article exceed five million dollars in any year during the period two 26 thousand fifteen through two thousand nineteen. 27 § 6. Paragraph 2 of subdivision (b) of section 24 of the tax law, as 28 added by section 1 of part P of chapter 60 of the laws of 2004, is 29 amended to read as follows: 30 (2) "Production costs" means any costs for tangible property used and 31 services performed directly and predominantly in the production (includ- 32 ing pre-production and post production) of a qualified film. Other than 33 with respect to qualified converted industrial space expenses paid or 34 incurred by a qualified converted industrial space film production 35 company, "[Production] production costs" shall not include (i) costs for 36 a story, script or scenario to be used for a qualified film and (ii) 37 wages or salaries or other compensation for writers, directors, includ- 38 ing music directors, producers and performers (other than background 39 actors with no scripted lines). "Production costs" generally include 40 technical and crew production costs, such as expenditures for film 41 production facilities, or any part thereof, props, makeup, wardrobe, 42 film processing, camera, sound recording, set construction, lighting, 43 shooting, editing and meals. 44 § 7. Paragraph 3 of subdivision (b) of section 24 of the tax law, as 45 amended by section 1 of part B of chapter 59 of the laws of 2013, is 46 amended to read as follows: 47 (3) "Qualified film" means a feature-length film, television film, 48 relocated television production, television pilot and/or each episode of 49 a television series, regardless of the medium by means of which the 50 film, pilot or episode is created or conveyed[.], provided, however, 51 that except as to be provided in regulations issued by the commissioner 52 of economic development with respect to a qualified film produced by a 53 converted industrial space film production company, "[Qualified] quali- 54 fied film" shall not include [(i)] a documentary film, news or current 55 affairs program, interview or talk program, "how-to" (i.e., instruc- 56 tional) film or program, film or program consisting primarily of stockA. 7182 5 1 footage, sporting event or sporting program, game show, award ceremony, 2 film or program intended primarily for industrial, corporate or institu- 3 tional end-users, fundraising film or program, daytime drama (i.e., 4 daytime "soap opera"), commercials, music videos or "reality" program[,5or (ii)]. In no case shall "qualified film" include a production for 6 which records are required under section 2257 of title 18, United States 7 code, to be maintained with respect to any performer in such production 8 (reporting of books, films, etc. with respect to sexually explicit 9 conduct). 10 § 8. Paragraph 5 of subdivision (b) of section 24 of the tax law, as 11 amended by section 8 of part Q of chapter 57 of the laws of 2010, is 12 amended to read as follows: 13 (5) "Qualified film production facility" shall mean a film production 14 facility in the state, which contains at least one sound stage having a 15 minimum of seven thousand square feet of contiguous production space, 16 provided, however, that except with respect to a qualified film 17 production facility being used by a qualified independent film 18 production company or a qualified converted industrial space film 19 production facility being used by a qualified converted industrial space 20 film production company: (i) a film production facility in the city of 21 New York must contain at least one sound stage having a minimum of seven 22 thousand square feet of contiguous production space that is sound proof 23 with a Noise Criteria ("NC") of 30 or better, has sufficient heating and 24 air conditioning for shooting without the need for supplemental units, 25 incorporates a permanent grid and sufficient built-in electric service 26 for shooting without the need for generators, and is column-free with a 27 clear height of at least sixteen feet under the permanent grid; and (ii) 28 an armory owned by the state or city of New York located in the city of 29 New York that does not satisfy the criteria of subparagraph (i) of this 30 paragraph shall be treated as a qualified film production facility upon 31 certification by the governor's office of motion picture and television 32 development of a petition submitted to that office by a qualified film 33 production company establishing that no qualified film production facil- 34 ity is available in the city of New York that has stage space available 35 for shooting such company's film. Such petition shall be submitted no 36 later than ninety days prior to the start of principal photography for 37 the qualified film and the governor's office of motion picture and tele- 38 vision development shall have ten days to certify or reject the peti- 39 tion. A stage will be deemed unavailable if consideration has been paid 40 for its use or such stage is currently under an agreement with an option 41 for use and, in either circumstance, such period of use includes the 42 petitioner's estimated start date of principal photography. 43 § 9. Subdivision (b) of section 24 of the tax law is amended by adding 44 four new paragraphs 9, 10, 11, and 12 to read as follows: 45 (9) "Qualified converted industrial space film production facility" 46 shall mean any film production facility in the state: (i) located in a 47 district that, under the zoning classifications promulgated by the New 48 York city planning commission, is currently or was formerly classified 49 as a manufacturing district; (ii) owned or leased by a qualified 50 converted industrial space film production company; and (iii) which 51 contains at least one sound stage having a minimum of four thousand five 52 hundred square feet of contiguous production space, that is sound proof 53 with a noise criteria of thirty or better, has sufficient heating and 54 air conditioning for shooting without the need for supplemental units, 55 incorporates sufficient built-in electric service for shooting without 56 the need for generators, has built-in live ingest and data transferA. 7182 6 1 facilities, and has a clear height of at least thirteen feet but not 2 more than fourteen feet. For purposes of this paragraph as applied to 3 any qualified converted industrial space film production facility, 4 "contiguous" shall not be interpreted to require any production space in 5 such facility to be column-free. 6 (10) "Qualified converted industrial space film production company" is 7 a corporation, partnership, limited partnership or limited liability 8 company which: (i) owns or leases a qualified converted industrial 9 space film production facility; (ii) employs throughout the year at 10 least eight hundred full-time staff in New York, of which at least five 11 hundred staff are located at the qualified converted industrial space 12 film production facility; and (iii) during the course of its ownership 13 or lease of the facility has invested a minimum of thirty-five million 14 dollars in capital expenditures to repurpose the facility as a film 15 production facility for the purpose of conducting film production activ- 16 ity therein. 17 (11) "Qualified converted industrial space expenses" shall mean 18 production costs (excluding post production costs) paid or incurred by a 19 qualified converted industrial space film production company in one or 20 more taxable years, and attributable to: (i) the use of tangible proper- 21 ty at a qualified converted industrial space film production facility, 22 (ii) the performance of services including wages paid to employees 23 located at a qualified converted industrial space film production facil- 24 ity, and (iii) wages that qualify for the ten percent credit under para- 25 graph five of subdivision (a) of this section. Qualified converted 26 industrial space expenses shall include costs for a story, script or 27 scenario to be used for a qualified film and wages or salaries or other 28 compensation for writers, directors, including music directors, produc- 29 ers and performers. 30 (12) "Interim application" shall mean an application filed by a quali- 31 fied converted industrial space film production company for production 32 credits under this section for a qualified film with respect to which 33 the company has paid or incurred at least fifty thousand dollars of 34 eligible spend. 35 § 10. Paragraph 4 of subdivision (e) of section 24 of the tax law, as 36 amended by section 1-a of part P of chapter 60 of the laws of 2016, is 37 amended to read as follows: 38 (4) Additional pool 2 - The aggregate amount of tax credits allowed in 39 subdivision (a) of this section shall be increased by an additional four 40 hundred twenty million dollars in each year starting in two thousand ten 41 through two thousand nineteen provided however, seven million dollars of 42 the annual allocation shall be available for the empire state film post 43 production credit pursuant to section thirty-one of this article in two 44 thousand thirteen and two thousand fourteen and twenty-five million 45 dollars of the annual allocation shall be available for the empire state 46 film post production credit pursuant to section thirty-one of this arti- 47 cle in each year starting in two thousand fifteen through two thousand 48 nineteen. This amount shall be allocated by the governor's office for 49 motion picture and television development among taxpayers in accordance 50 with subdivision (a) of this section. If the commissioner of economic 51 development determines that the aggregate amount of tax credits avail- 52 able from additional pool 2 for the empire state film production tax 53 credit have been previously allocated, and determines that the pending 54 applications from eligible applicants for the empire state film post 55 production tax credit pursuant to section thirty-one of this article is 56 insufficient to utilize the balance of unallocated empire state filmA. 7182 7 1 post production tax credits from such pool, the remainder, after such 2 pending applications are considered, shall be made available for allo- 3 cation in the empire state film tax credit pursuant to this section, 4 subdivision [thirty-six] twenty of section two hundred [ten] ten-B and 5 subsection (gg) of section six hundred six of this chapter. Also, if the 6 commissioner of economic development determines that the aggregate 7 amount of tax credits available from additional pool 2 for the empire 8 state film post production tax credit have been previously allocated, 9 and determines that the pending applications from eligible applicants 10 for the empire state film production tax credit pursuant to this section 11 is insufficient to utilize the balance of unallocated film production 12 tax credits from such pool, then all or part of the remainder, after 13 such pending applications are considered, shall be made available for 14 allocation for the empire state film post production credit pursuant to 15 this section, subdivision [forty-one] thirty-two of section two hundred 16 [ten] ten-B and subsection [(gg)] (qq) of section six hundred six of 17 this chapter. The governor's office for motion picture and television 18 development must notify taxpayers of their allocation year and include 19 the allocation year on the certificate of tax credit. Taxpayers eligible 20 to claim a credit must report the allocation year directly on their 21 empire state film production credit tax form for each year a credit is 22 claimed and include a copy of the certificate with their tax return. In 23 the case of a qualified film that receives funds from additional pool 2 24 other than a qualified film produced by a qualified converted industrial 25 space film production company, no empire state film production credit 26 shall be claimed before the later of the taxable year the production of 27 the qualified film is complete, or the taxable year immediately follow- 28 ing the allocation year for which the film has been allocated credit by 29 the governor's office for motion picture and television development. In 30 the case of a qualified converted industrial space film production 31 company, a qualified film shall be deemed to be complete in the taxable 32 year in which the qualified film is actually completed, or the taxable 33 year in which an interim application is properly filed under this 34 section in respect of such qualified film. 35 § 11. The state commissioner of economic development, after consulting 36 with the state commissioner of taxation and finance, shall promulgate 37 any regulations as may be necessary to effectuate the changes instituted 38 by this act by December 31, 2017. 39 (i) The commissioner of economic development, after consulting with 40 the commissioner of taxation and finance, shall promulgate rules to 41 update the definitions contained in the regulations to be consistent 42 with section 24 of the tax law, as amended by this act. Such rules and 43 regulations shall include provisions with respect to qualified converted 44 industrial space film production companies describing the application 45 process, the due dates for such applications, the standards which shall 46 be used to evaluate the applications, the documentation that will be 47 provided to substantiate to the department of taxation and finance the 48 amount of tax credits allocated to such taxpayers, under what conditions 49 all or a portion of this tax credit may be revoked, and such other 50 provisions as deemed necessary and appropriate. Notwithstanding any 51 other provisions to the contrary in the state administrative procedure 52 act, such rules and regulations may be adopted on an emergency basis if 53 necessary to meet such December 31, 2017 deadline, and shall explicitly 54 provide for a mechanism for a qualified converted industrial space film 55 production company with at least fifty thousand dollars in eligible 56 spend paid or incurred over one or more tax years commencing on or afterA. 7182 8 1 January 1, 2017 to claim the credit with respect to such year on its 2 timely filed New York state income tax return for such tax year, includ- 3 ing any excess eligible for refund under subdivision 48 of section 210-B 4 of the tax law. The rules shall ensure that no such applications submit- 5 ted with respect to a qualified film is rejected as premature or incom- 6 plete, based on submission of sufficient supporting documentation. 7 Regardless of whether such rules and regulation have been adopted, the 8 commissioner shall not under any circumstances deny or fail to certify a 9 qualified converted industrial space film production company with 10 respect to any qualified film produced at a qualified converted indus- 11 trial space film production facility, including any interim application 12 meeting the fifty thousand dollar threshold contained in paragraph 2 of 13 subdivision (a) of section 24 of the tax law, as amended by section two 14 of this act, on account of such rules and regulations not having been 15 promulgated. The governor's office for motion picture and television 16 development must notify each qualified converted industrial space film 17 production company of its allocation year with respect to each applica- 18 tion meeting the requirements of section 24 of the tax law, as amended 19 by this act. 20 (ii) The state commissioner of economic development, after consulting 21 with the state commissioner of taxation and finance, shall promulgate 22 rules to modify the definition of "qualified film" solely with respect 23 to a qualified converted industrial space film production company, to 24 explicitly permit such company to obtain the credit under paragraph (1) 25 of subdivision (a) of section 24 of the tax law for content transmitted 26 via any means or medium including television, film, digital media, and 27 mobile, and will permit such a company to file applications under 28 section 24 of the tax law for: (a) documentary films and shorts; (b) 29 "how-to" (i.e., instructional) films or programs; (c) long-form, 30 specials, mini-series, series, and interstitial television programming; 31 and (d) "reality" programming. The new rules shall exempt any qualified 32 film produced by a qualified converted industrial space film production 33 company from scripting requirements. 34 § 12. This act shall take effect immediately and shall apply to taxa- 35 ble years beginning on or after January 1, 2017.
