Bill Text: NY S06997 | 2023-2024 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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
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
STATE OF NEW YORK ________________________________________________________________________ 6997--A 2023-2024 Regular Sessions IN SENATE May 16, 2023 ___________ Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -- 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 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. Paragraph 1 of subdivision (a) and subdivision (b) and (c) 2 of section 45 of the tax law, as added by section 1 of part OO of chap- 3 ter 59 of the laws of 2022, are amended to read as follows: 4 (1) A taxpayer which is a digital gaming media production entity 5 engaged in qualified digital gaming media production, or who is a sole 6 proprietor of or a member of a partnership, which is a digital gaming 7 media production entity engaged in qualified digital gaming media 8 production, and is subject to tax under article nine-A or twenty-two of 9 this chapter, shall be allowed a credit against such tax to be computed 10 as provided herein for taxable years beginning on or after January 11 first, two thousand twenty-three and before January first, two thousand 12 [twenty-eight] thirty. 13 (b) Allocation of credit. The aggregate amount of tax credits allowed 14 under this section, subdivision fifty-five of section two hundred ten-B 15 and subsection (nnn) of section six hundred six of this chapter in any 16 taxable year shall be [five] one hundred million dollars. Such credit 17 shall be allocated by the department of economic development in order of 18 priority based upon the date of filing an application for allocation of 19 digital gaming media production credit with such office. An applicant 20 shall submit an annual application which shall include all qualified 21 digital gaming media productions for the taxable year along with an 22 estimate of the digital gaming media production costs. The application EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11262-03-4S. 6997--A 2 1 can be submitted no earlier than ninety days prior to the first day of 2 the applicable taxable year. If the total amount of allocated credits 3 applied for in any particular year exceeds the aggregate amount of tax 4 credits allowed for such year under this section, such excess shall be 5 treated as having been applied for on the first day of the subsequent 6 taxable year. 7 (c) Definitions. As used in this section: 8 (1) "Qualified digital gaming media production" means: (i) a website, 9 the digital media production costs of which are paid or incurred predo- 10 minately in connection with (A) video simulation, animation, text, 11 audio, graphics or similar gaming related property embodied in digital 12 format, and (B) interactive features of digital gaming (e.g., links, 13 message boards, communities or content manipulation); (ii) video or 14 interactive games produced primarily for distribution over the internet, 15 wireless network or successors thereto; and (iii) animation, simulation 16 or embedded graphics digital gaming related software intended for 17 commercial distribution regardless of medium; provided, however, that 18 the qualified digital game development media productions described in 19 subparagraphs (i) through (iii) of this paragraph must have digital 20 media production costs equal to or in excess of [one hundred] fifty 21 thousand dollars per production. A qualified digital gaming media 22 production does not include a website, video, interactive game or soft- 23 ware that is used predominately for: electronic commerce (retail or 24 wholesale purposes other than the sale of video interactive games), 25 gambling (including activities regulated by a New York gaming agency), 26 or political advocacy purposes. 27 (2) "Digital gaming media production costs" means any costs for wages 28 [or salaries] paid to individuals, [other than actors or writers,] 29 directly employed for services performed by those individuals directly 30 [and predominantly] in the creation of a digital gaming media production 31 or productions. [Up to one hundred thousand dollars in wages and sala-32ries paid to such employees, other than actors and writers, directly33employed shall be used in the calculation of this credit.] Digital 34 gaming media production costs include but shall not be limited to 35 payments for services performed directly [and predominantly] in the 36 development (including concept creation), [design,] production (includ- 37 ing concept creation), design, production (including testing), editing 38 (including encoding) and compositing (including the integration of 39 digital files for interaction by end users) of digital gaming media. 40 Digital gaming media production costs shall not include expenses 41 incurred for the distribution, marketing, promotion, or advertising 42 content generated by end users, other costs not directly [and predomi-43nantly] related to the creation, production or modification of digital 44 gaming media or costs used by the taxpayer as a basis of the calculation 45 of any other tax credit allowed under this chapter. In addition, [sala-46ries or other income distribution] wages related to the creation of 47 digital gaming media for any person who predominately serves in a corpo- 48 rate capacity in the role of chief executive officer, chief financial 49 officer, president, treasurer or similar corporate position and who is 50 not directly engaged in services related to the creation of a digital 51 gaming media production or productions shall not be included as digital 52 gaming media production costs if the digital gaming media production 53 entity has more then ten employees. [Salaries or other income] Wages 54 paid to a person serving in such a role for the digital gaming media 55 production entity shall also not be included if the person was employed 56 by a related person of the digital gaming media production entity withinS. 6997--A 3 1 sixty months of the date the digital gaming media production entity 2 applied for the tax credit certificate described in subdivision (d) of 3 this section. For purposes of the preceding sentence, a related person 4 shall have the same meaning as the term "related person" in section four 5 hundred sixty-five of the internal revenue code. [Furthermore, any6income or other distribution to any individual including, but not limit-7ed to, licensing or royalty fees, who holds an ownership interest in a8digital gaming media production entity, whether or not such individual9is serving in the role of chief executive officer, chief financial offi-10cer, president, treasurer or similar position for such an entity, shall11not be included as digital gaming media production costs. Up to four12million dollars in qualified digital gaming media production costs per13production shall be used in the calculation of this credit.] Digital 14 gaming media production costs shall not include those costs used by the 15 taxpayer or another taxpayer as the basis calculation of any other tax 16 credit allowed under this chapter. 17 (3) "Qualified digital gaming media production costs" means digital 18 gaming media production costs only to the extent such costs are attrib- 19 utable to the use of property or the performance of services by any 20 persons within the state directly [and predominantly] in the creation, 21 production or modification of digital gaming related media. [Such total22production costs incurred and paid in this state shall be equal to or23exceed seventy-five percent of total cost of an eligible production24incurred and paid within and without this state.] 25 (4) "Digital gaming media production entity" means a corporation, 26 partnership, limited partnership or other entity or individual engaged 27 in qualified digital game development media production. 28 § 2. Paragraph (a) of subdivision 55 of section 210-b of the tax law, 29 as added by section 2 of part OO of chapter 59 of the laws of 2022, is 30 amended to read as follows: 31 (a) Allowance of credit. A taxpayer who is eligible pursuant to 32 section forty-five of this chapter shall be allowed a credit to be 33 computed as provided in such section forty-five against the tax imposed 34 by this article. [Under no circumstances may a single taxpayer receive35more than one million five hundred thousand dollars in tax credits per36year.] 37 § 3. Paragraph 1 of subsection (nnn) of section 606 of the tax law, as 38 added by section 4 of part OO of chapter 59 of the laws of 2022, is 39 amended to read as follows: 40 (1) Allowance of credit. A taxpayer who is eligible pursuant to 41 section forty-five of this chapter shall be allowed a credit to be 42 computed as provided in such section forty-five against the tax imposed 43 by this article. [Under no circumstances may a single taxpayer receive44more than one million five hundred thousand dollars in tax credits per45year.] 46 § 4. This act shall take effect immediately and shall apply to taxable 47 years beginning on and after January 1, 2023 and before January 1, 2030.