NY Tax L § 28 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 28 - Empire State Commercial Production Credit.

* §  28.  Empire  state commercial production credit. (a) Allowance of credit. (1) A  taxpayer  which  is  a  qualified  commercial  production company,  or  which  is  a  sole  proprietor  of  a qualified commercial production company, and which is subject to tax under article nine-A  or twenty-two  of this chapter, shall be allowed a credit against such tax, pursuant to  the  provisions  referenced  in  subdivision  (c)  of  this section,  to be computed as provided in this section. Provided, however, to be eligible for such credit, at least  seventy-five  percent  of  the production  costs  (excluding  post  production  costs) paid or incurred directly and predominantly in the actual filming  or  recording  of  the qualified  commercial  must be costs incurred in New York state. The tax credit allowed pursuant to this section shall  apply  to  taxable  years beginning before January first, two thousand twenty-four.  (2)  The state has annually seven million dollars in total tax credits to disburse to all eligible commercial production companies.  The  seven million  dollars  in  total  tax credits shall be allocated according to subparagraphs (i) and (ii) of this paragraph:  (i) The state annually will disburse four million of the  total  seven million  in tax credits to all eligible production companies who film or record  qualified   commercials   within   the   metropolitan   commuter transportation  district  as defined in section twelve hundred sixty-two of the public authorities law. The amount of the  credit  shall  be  the product  (or pro rata share of the product, in the case of a member of a partnership) of twenty percent of the qualified production costs paid or incurred in the production of a qualified commercial, provided that  the qualified  production costs paid or incurred are attributable to the use of tangible property or the performance of services within the state  in the  production  of  such  qualified commercial. To be eligible for said credit the total qualified production costs of  a  qualified  production company  must  be  greater  than  five  hundred  thousand dollars in the aggregate during the calendar year.  Such  credit  will  be  applied  to qualified  production costs exceeding five hundred thousand dollars in a calendar year.  (ii) The state annually will disburse three million of the total seven million in tax credits to all eligible production companies who film  or record  a  qualified  commercial  outside  of  the metropolitan commuter transportation district as defined in section twelve  hundred  sixty-two of  the  public  authorities law; provided, however, that if, after July thirty-first the state reviews all applications from eligible production companies who film or record  a  qualified  commercial  outside  of  the metropolitan  commuter  district  for  a  given year, tax credits remain unallocated under this subparagraph, those credits shall be allotted  to the  credits  set  forth  in  subparagraph (i) of this paragraph for use consistent with the purposes of such subparagraph.  The  amount  of  the credit  shall  be  the product (or pro rata share of the product, in the case of a member of a partnership) of thirty percent  of  the  qualified production  costs  paid  or  incurred  in  the production of a qualified commercial,  provided  that  the  qualified  production  costs  paid  or incurred  are  attributable  to  the  use  of  tangible  property or the performance of services within the  state  in  the  production  of  such qualified commercial. To be eligible for said credit the total qualified production  costs of a qualified production company must be greater than one hundred thousand dollars in the aggregate during the calendar  year. Such  credit  will  be  applied  to  all qualified production costs in a calendar year.  (3) No qualified production costs used by a  taxpayer  either  as  the basis for the allowance of the credit provided for under this section or used  in  the  calculation of the credit provided for under this section  shall be used by  such  taxpayer  to  claim  any  other  credit  allowed pursuant to this chapter.  (4)  Notwithstanding any provisions of this section to the contrary, a corporation or partnership, which otherwise  qualifies  as  a  qualified commercial  production  company,  and  is  similar  in  operation and in ownership to a  business  entity  or  entities  taxable,  or  previously taxable,   under   section  one  hundred  eighty-three  or  one  hundred eighty-four or former section one hundred eighty-five of  article  nine; article  nine-A or thirty-three of this chapter or which would have been subject to tax under article  twenty-three  of  this  chapter  (as  such article  was  in  effect  on  January first, nineteen hundred eighty) or which would have been subject to tax under article  thirty-two  of  this chapter  (as  such  article  was in effect on December thirty-first, two thousand fourteen) or the income or losses of which is or was includable under article twenty-two of this chapter shall not be deemed  a  new  or separate  business, and therefore shall not be eligible for empire state commercial production benefits,  if  it  was  not  formed  for  a  valid business  purpose, as such term is defined in clause (D) of subparagraph one of paragraph (o) of subdivision nine of section two hundred eight of this chapter and was formed  solely  to  gain  empire  state  commercial production credit benefits.  (b)  Definitions.  As  used in this section, the following terms shall have the following meanings:  (1) "Qualified production costs" means production costs  only  to  the extent  such  costs  are attributable to the use of tangible property or the performance of services within the state directly and  predominantly in  the  production  (including pre-production and post-production) of a qualified commercial.  (2) "Production costs" means any costs for tangible property used  and services   performed   directly  and  predominantly  in  the  production (including  pre-production   and   post-production)   of   a   qualified commercial.  "Production costs" shall not include (i) costs for a story, script or scenario to be used for a qualified commercial and (ii)  wages or  salaries  or  other  compensation  for writers, directors, including music directors, producers and performers (other than background  actors with  no  scripted  lines  who  are  employed by a qualified company and musicians). "Production costs"  generally  include  technical  and  crew production   costs,  such  as  expenditures  for  commercial  production facilities and/or location costs, or any part thereof, film,  audiotape, videotape   or  digital  medium,  props,  makeup,  wardrobe,  commercial processing,  camera,  sound  recording,   scoring,   set   construction, lighting,  shooting,  editing  and  meals. For purposes of this section, "post production costs" include the production of original content for a qualified  commercial  employing  techniques   traditionally   used   in post-production  for  visual  effects,  graphic  design,  animation, and musical composition. However,  where  the  commercial  consists  in  its entirety  of  techniques  such  as  visual  effects,  graphic design, or animation, such costs incurred in the production of the commercial, when occurring in New York, shall be deemed qualified  production  costs  for the  purposes  of  this  section.  Provided further, however, that "post production costs" shall not include the editing of  previously  produced content for a qualified commercial.  (3)  "Qualified  commercial" means an advertisement of any length that is recorded on film, audiotape, videotape or digital medium in New  York for  multi-market  distribution  by  way  of radio, television networks, cable,  satellite,  motion  picture  theaters  or  internet.  "Qualified commercial"  shall  not  include  (i)  news  or current affairs program, interview or talk program, network promos, i.e.,  commercials  promoting  television  series  or movies, "how-to" (i.e., instructional) commercial or program, commercial or program consisting entirely of stock  footage, trailers promoting theatrical films, sporting event or sporting program, game  show,  award ceremony, daytime drama (i.e., daytime "soap opera"), or "reality" program,  or  (ii)  a  production  for  which  records  are required  under  section  2257  of  title  18, United States code, to be maintained with respect to any performer in such  production  (reporting of books, commercials, etc. with respect to sexually explicit conduct).  (4)  "Qualified  commercial  production  company"  is  a  corporation, partnership, limited partnership, or other entity or individual which or who is principally engaged in the production of a  qualified  commercial and  controls  the production of the qualified commercial and is not the distributor,  or  the  contracting  entity  for   production   of   such commercial,  nor  is  a  variable interest entity of such distributor or contracting entity.  (c) The department of economic development shall submit, on or  before December  first  of  each  year,  to  the  governor, the director of the division of the budget, the temporary president of the senate,  and  the speaker  of the assembly an annual report including, but not limited to, the following information regarding the previous calendar year:  (1) the total dollar amount of credits allocated, the name and address of each qualified commercial production company allocated credits  under this  section,  the  total amount of credits allocated to each qualified commercial production company, the total amount of qualified  production costs  and  production  costs  for  each qualified commercial production company, and the estimated  number  of  employees,  credit-eligible  man hours,   and   credit-eligible  wages  associated  with  each  qualified commercial production company allocated credits under this section;  (2) for qualified commercial production companies that were  allocated credit  pursuant to subparagraph (i) of paragraph two of subdivision (a) of this section: the name  and  address  of  each  qualified  commercial production  company,  the  total dollar amount of credits allocated, the total  amount  of  credits  allocated  to  each   qualified   commercial production  company,  total  qualified  production  costs and production costs for each qualified production company, and the estimated number of employees,  credit-eligible  man  hours,   and   credit-eligible   wages associated with each qualified commercial production company that filmed or recorded a qualified commercial within the district;  (3)  for qualified commercial production companies that were allocated credit pursuant to subparagraph (ii) of paragraph two of subdivision (a) of this section: the name  and  address  of  each  qualified  commercial production  company,  the  total dollar amount of credits allocated, the total  amount  of  credits  allocated  to  each   qualified   commercial production  company,  total  qualified  production  costs and production costs for each qualified production company, and the estimated number of employees,  credit-eligible  man  hours,   and   credit-eligible   wages associated with each qualified commercial production company that filmed or recorded a qualified commercial outside the district; and  (4)  the  amount  of  credits  reallocated  to  all eligible qualified commercial  production  companies  pursuant  to  subparagraph  (ii)   of paragraph two of subdivision (a) of this section.  (5) The report may also include any recommendations for changes in the calculation  or  administration of the credit, recommendations regarding continuing  modification  or  repeal  of  this  credit,  and  any  other information regarding this credit as may be useful and appropriate.  (d)  Cross-references.  For  application of the credit provided for in this section, see the following provision of this chapter:  (1) article 9-A: section 210-B: subdivision 23.  (2) article 22: section 606: subsection (jj).   * NB There are 2 § 28's