Bill Text: NY S06997 | 2023-2024 | General Assembly | Amended

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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: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2024-06-05 - referred to ways and means [S06997 Detail]

Download: New_York-2023-S06997-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         6997--B

                               2023-2024 Regular Sessions

                    IN SENATE

                                      May 16, 2023
                                       ___________

        Introduced  by  Sens. BRESLIN, COONEY -- read twice and ordered printed,
          and when printed to be committed to the Committee on Budget and Reven-
          ue -- recommitted to the Committee on Budget and Revenue in accordance
          with Senate Rule 6, sec. 8  --  committee  discharged,  bill  amended,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to said committee

        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
    18  treated as having been applied for on the first day  of  the  subsequent
    19  taxable year.
    20    (c) Definitions. As used in this section:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11262-06-4
        S. 6997--B                          2

     1    (1)  "Qualified digital gaming media production" means: (i) a website,
     2  the digital media production costs of which are paid or incurred  predo-
     3  minately  in  connection  with  (A)  video  simulation, animation, text,
     4  audio, graphics or similar gaming related property embodied  in  digital
     5  format,  and  (B)  interactive  features of digital gaming (e.g., links,
     6  message boards, communities or  content  manipulation);  (ii)  video  or
     7  interactive games produced primarily for distribution over the internet,
     8  wireless  network or successors thereto; and (iii) animation, simulation
     9  or embedded  graphics  digital  gaming  related  software  intended  for
    10  commercial  distribution  regardless  of medium; provided, however, that
    11  the qualified digital game development media  productions  described  in
    12  subparagraphs  (i)  through  (iii)  of  this paragraph must have digital
    13  media production costs equal to or in  excess  of  [one  hundred]  fifty
    14  thousand  dollars  per  production.  A  qualified  digital  gaming media
    15  production does not include a website, video, interactive game or  soft-
    16  ware  that  is  used  predominately  for: electronic commerce (retail or
    17  wholesale purposes other than the  sale  of  video  interactive  games),
    18  gambling  (including  activities regulated by a New York gaming agency),
    19  or political advocacy purposes.
    20    (2) "Digital gaming media production costs" means any costs for  wages
    21  [or  salaries]  paid  to  individuals,  [other  than actors or writers,]
    22  directly employed for services performed by those  individuals  directly
    23  [and predominantly] in the creation of a digital gaming media production
    24  or  productions.  [Up to one hundred thousand dollars in wages and sala-
    25  ries paid to such employees, other than  actors  and  writers,  directly
    26  employed  shall  be  used  in  the  calculation of this credit.] Digital
    27  gaming media production costs  include  but  shall  not  be  limited  to
    28  payments  for  services  performed  directly  [and predominantly] in the
    29  development (including concept creation), [design,] production  (includ-
    30  ing  concept  creation), design, production (including testing), editing
    31  (including encoding)  and  compositing  (including  the  integration  of
    32  digital  files  for  interaction  by end users) of digital gaming media.
    33  Digital  gaming  media  production  costs  shall  not  include  expenses
    34  incurred  for  the  distribution,  marketing,  promotion, or advertising
    35  content generated by end users, other costs not directly  [and  predomi-
    36  nantly]  related  to the creation, production or modification of digital
    37  gaming media or costs used by the taxpayer as a basis of the calculation
    38  of any other tax credit allowed under this chapter. In addition,  [sala-
    39  ries  or  other  income  distribution]  wages related to the creation of
    40  digital gaming media for any person who predominately serves in a corpo-
    41  rate capacity in the role of chief executive  officer,  chief  financial
    42  officer,  president,  treasurer or similar corporate position and who is
    43  not directly engaged in services related to the creation  of  a  digital
    44  gaming  media production or productions shall not be included as digital
    45  gaming media production costs if the  digital  gaming  media  production
    46  entity  has  more  then  ten employees. [Salaries or other income] Wages
    47  paid to a person serving in such a role for  the  digital  gaming  media
    48  production  entity shall also not be included if the person was employed
    49  by a related person of the digital gaming media production entity within
    50  sixty months of the date the  digital  gaming  media  production  entity
    51  applied  for  the tax credit certificate described in subdivision (d) of
    52  this section. For purposes of the preceding sentence, a  related  person
    53  shall have the same meaning as the term "related person" in section four
    54  hundred  sixty-five  of  the  internal  revenue  code. [Furthermore, any
    55  income or other distribution to any individual including, but not limit-
    56  ed to, licensing or royalty fees, who holds an ownership interest  in  a
        S. 6997--B                          3

     1  digital  gaming  media production entity, whether or not such individual
     2  is serving in the role of chief executive officer, chief financial offi-
     3  cer, president, treasurer or similar position for such an entity,  shall
     4  not  be  included  as  digital gaming media production costs. Up to four
     5  million dollars in qualified digital gaming media production  costs  per
     6  production  shall  be  used  in the calculation of this credit.] Digital
     7  gaming media production costs shall not include those costs used by  the
     8  taxpayer  or  another taxpayer as the basis calculation of any other tax
     9  credit allowed under this chapter.
    10    (3) "Qualified digital gaming media production  costs"  means  digital
    11  gaming  media production costs only to the extent such costs are attrib-
    12  utable to the use of property or the  performance  of  services  by  any
    13  persons  within  the state directly [and predominantly] in the creation,
    14  production or modification of digital gaming related media. [Such  total
    15  production  costs  incurred  and paid in this state shall be equal to or
    16  exceed seventy-five percent of total  cost  of  an  eligible  production
    17  incurred and paid within and without this state.]
    18    (4)  "Digital  gaming  media  production  entity" means a corporation,
    19  partnership, limited partnership or other entity or  individual  engaged
    20  in qualified digital game development media production.
    21    § 2. This act shall take effect immediately and shall apply to taxable
    22  years beginning on and after January 1, 2024 and before January 1, 2028.