NY Tax L § 24 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 24 - Empire State Film Production Credit.

§  24.  Empire  state  film  production  credit.  (a) (1) Allowance of credit. A taxpayer which is a qualified film production  company,  or  a qualified  independent  film  production  company,  or  which  is a sole proprietor of or a member of a partnership which  is  a  qualified  film production  company  or a qualified independent film production company, and which is subject to tax under articles 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 hereinafter provided.  (2) 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-five percent  and  the  qualified  production  costs  paid or incurred in the production of  a  qualified  film,  provided  that:  (i)  the  qualified production  costs  (excluding  post  production  costs) paid or incurred which  are  attributable  to  the  use  of  tangible  property  or   the performance  of  services at a qualified film production facility in the production of such qualified film equal or exceed  seventy-five  percent of  the  production  costs  (excluding  post  production  costs) paid or incurred which are attributable to the use of tangible property  or  the performance  of  services  at  any  film  production facility within and without the state in the production of such  qualified  film,  and  (ii) except  with  respect to a qualified independent film production company or pilot, at least  ten  percent  of  the  total  principal  photography shooting  days  spent  in  the production of such qualified film must be spent at a qualified film production facility. However, if the qualified production  costs  (excluding   post   production   costs)   which   are attributable  to  the  use  of  tangible  property or the performance of services at a qualified film production facility in  the  production  of such qualified film is less than three million dollars, then the portion of  the  qualified  production costs attributable to the use of tangible property or the performance  of  services  in  the  production  of  such qualified  film outside of a qualified film production facility shall be allowed only if the shooting days spent in New York outside  of  a  film production  facility  in  the production of such qualified film equal or exceed seventy-five percent of the total shooting days spent within  and without New York outside of a film production facility in the production of such qualified film. The credit shall be allowed for the taxable year in which the production of such qualified film is completed. However, in the case of a qualified film that receives funds from additional pool 2, no  credit shall be claimed before the later of (1) the taxable year the production of the qualified film is complete, or (2) the  first  taxable year  beginning immediately after the allocation year for which the film has been allocated credit by the governor's office  for  motion  picture and  television development. If the amount of the credit is at least one million dollars but less than five million dollars, the credit shall  be claimed  over  a  two year period beginning in the first taxable year in which the credit may be claimed and in the next succeeding taxable year, with one-half of the amount of credit  allowed  being  claimed  in  each year.  If the amount of the credit is at least five million dollars, the credit shall be claimed over a three year period beginning in the  first taxable  year  in  which  the  credit may be claimed and in the next two succeeding taxable years, with one-third of the  amount  of  the  credit allowed being claimed in each 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 the foregoing provisions of  this  subdivision,  a qualified   film   production  company  or  qualified  independent  film production company, that has applied for credit under the provisions  of this  section, agrees as a condition for the granting of the credit: (i) to include in each qualified film distributed by DVD, or other media for the  secondary  market,  a  New  York  promotional video approved by the governor's office of motion picture and  television  development  or  to include  in  the  end  credits  of  each qualified film "Filmed With the Support of the New York State Governor's Office of  Motion  Picture  and Television  Development" and a logo provided by the governor's office of motion picture and television development, and (ii) to certify  that  it will  purchase  taxable  tangible  property  and  services,  defined  as qualified production costs pursuant to paragraph one of subdivision  (b) of  this  section,  only  from companies registered to collect and remit state and local sales and use taxes pursuant  to  articles  twenty-eight and twenty-nine of this chapter.  (5)   For  the  period  two  thousand  fifteen  through  two  thousand twenty-six, in addition to the amount of credit established in paragraph two of this subdivision, a taxpayer shall be allowed a credit  equal  to the  product  (or pro rata share of the product, in the case of a member of a partnership) of ten percent and the amount  of  wages  or  salaries paid  to  individuals  directly  employed  (excluding  those employed as writers, directors, music directors, producers and performers, including background actors with no scripted lines) by a qualified film production company or a qualified independent film production company for  services performed  by those individuals in one of the counties specified in this paragraph in connection with a qualified film with a minimum  budget  of five  hundred  thousand dollars. For purposes of this additional credit, the services must be performed in one or more of the following counties: Albany, Allegany,  Broome,  Cattaraugus,  Cayuga,  Chautauqua,  Chemung, Chenango,  Clinton, Columbia, Cortland, Delaware, Dutchess, Erie, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison,  Monroe,  Montgomery,  Niagara,  Oneida,  Onondaga, Ontario,  Orange, Orleans, Oswego, Otsego, Putnam, Rensselaer, Saratoga, Schenectady,  Schoharie,  Schuyler,  Seneca,  St.   Lawrence,   Steuben, Sullivan,  Tioga,  Tompkins, Ulster, Warren, Washington, Wayne, Wyoming, or Yates. The aggregate amount of tax credits allowed  pursuant  to  the authority  of  this  paragraph  shall  be five million dollars each year during the period two thousand fifteen through two  thousand  twenty-six of  the  annual  allocation  made  available  to the program pursuant to paragraph four of subdivision (e) of this section. Such aggregate amount of credits shall be  allocated  by  the  governor's  office  for  motion picture  and television development among taxpayers in order of priority based upon the date of filing an  application  for  allocation  of  film production  credit  with  such  office. If the total amount of allocated credits applied for  under  this  paragraph  in  any  year  exceeds  the aggregate  amount  of  tax  credits  allowed  for  such  year under this paragraph, such excess shall be treated as having been  applied  for  on the  first  day  of  the next year. If the total amount of allocated tax credits applied for under this paragraph at the conclusion of  any  year is  less  than  five  million dollars, the remainder shall be treated as part of the annual allocation made available to the program pursuant  to paragraph  four of subdivision (e) of this section. However, in no event may the total of the credits allocated  under  this  paragraph  and  the credits  allocated  under  paragraph  five of subdivision (a) of section thirty-one of this article exceed  five  million  dollars  in  any  year during the period two thousand fifteen through two thousand twenty-six.  (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 film.  (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 film. "Production costs" shall not include (i) costs for a  story,  script  or scenario  to  be used for a qualified film 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).  "Production  costs"  generally  include  technical   and   crew production  costs,  such as expenditures for film production facilities, or any part thereof, props, makeup, wardrobe, film  processing,  camera, sound  recording,  set  construction,  lighting,  shooting,  editing and meals.  (3) "Qualified film" means a  feature-length  film,  television  film, relocated  television production, television pilot or television series, regardless of the medium by means of which the film, pilot or series  is created  or  conveyed.  For  the purposes of the credit provided by this section only, a "qualified film" whose majority of principal photography shooting days in the production  of  the  qualified  film  are  shot  in Westchester,  Rockland, Nassau, or Suffolk county or any of the five New York City boroughs shall have a minimum budget of one million dollars. A "qualified film", whose majority of principal photography shooting  days in  the production of the qualified film are shot in any other county of the state than those listed in  the  preceding  sentence  shall  have  a minimum  budget  of two hundred fifty thousand dollars. "Qualified film" shall not include: (i) a  documentary  film,  news  or  current  affairs program,  interview or talk program, "how-to" (i.e., instructional) film or program, film or  program  consisting  primarily  of  stock  footage, sporting  event  or sporting program, game show, award ceremony, film or program intended primarily for industrial,  corporate  or  institutional end-users,  fundraising  film  or  program, daytime drama (i.e., daytime "soap opera"), commercials, music videos or "reality"  program;  (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, films, etc. with respect to sexually explicit conduct); or (iii) other than a  relocated  television production, a television series commonly known as variety entertainment, variety  sketch  and  variety  talk,  i.e., a program with components of improvisational or scripted content (monologues, sketches,  interviews), either  exclusively  or in combination with other entertainment elements such as musical performances, dancing, cooking, crafts, pranks,  stunts, and  games  and  which  may  be  further  defined  in regulations of the commissioner of economic development. However, a  qualified  film  shall include  a  television series as described in subparagraph (iii) of this paragraph only if  an  application  for  such  series  has  been  deemed conditionally  eligible  for  the tax credit under this section prior to April first, two thousand twenty,  such  series  remains  in  continuous production for each season, and an annual application for each season of such  series is continually submitted for such series after April first, two thousand twenty.  (4) "Film production facility" shall mean a building and/or complex of buildings and their improvements and associated back-lot  facilities  in  which  films  are  or  are  intended  to be regularly produced and which contain at least one sound stage,  provided,  however,  that  an  armory owned  by  the state or city of New York located in the city of New York shall  not  be  considered  to be a "film production facility" unless it meets the criteria contained in paragraph five of  this  subdivision  or unless  such facility is used by a qualified independent film production company.  (5) "Qualified film production facility" shall mean a film  production facility  in the state, which contains at least one sound stage having a minimum of seven thousand square feet of  contiguous  production  space, provided,  however,  that  except  with  respect  to  a  qualified  film production  facility  being  used  by  a  qualified   independent   film production  company:  (i)  a film production facility in the city of New York must contain at least one sound stage having  a  minimum  of  seven thousand  square feet of contiguous production space that is sound proof with a Noise Criteria ("NC") of 30 or better, has sufficient heating and air conditioning for shooting without the need for  supplemental  units, incorporates  a  permanent grid and sufficient built-in electric service for shooting without the need for generators, and is column-free with  a clear  height  of  at  least  sixteen  feet under the permanent grid for facilities constructed on or after January first, two thousand nineteen, and at least  twelve  feet  under  the  permanent  grid  for  facilities constructed  before  January  first,  two thousand nineteen; and (ii) an armory owned by the state or city of New York located in the city of New York that does not satisfy the criteria  of  subparagraph  (i)  of  this paragraph  shall be treated as a qualified film production facility upon certification by the governor's office of motion picture and  television development  of  a petition submitted to that office by a qualified film production  company  establishing  that  no  qualified  film  production facility  is  available  in  the  city  of New York that has stage space available for shooting such  company's  film.  Such  petition  shall  be submitted  no  later  than  ninety  days prior to the start of principal photography for the qualified film and the governor's office  of  motion picture  and  television  development  shall have ten days to certify or reject the petition. A stage will be deemed unavailable if consideration has been paid for its use or such stage is currently under an  agreement with  an  option for use and, in either circumstance, such period of use includes the petitioner's estimated start date of principal photography.  (6) "Qualified film 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 film and controls the qualified film during production.  (7) "Qualified independent film production company" is a  corporation, partnership, limited partnership, or other entity or individual, that or who  (i)  is  principally  engaged in the production of a qualified film with a maximum budget of fifteen million dollars, and (ii) controls  the qualified  film  during  production,  and (iii) either is not a publicly traded entity, or no more than five percent of the beneficial  ownership of which is owned, directly or indirectly, by a publicly traded entity.  (8)  "Relocated television production" shall mean, notwithstanding the limitations in subparagraph (i) of paragraph three of this  subdivision, a television production that is a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season in  New  York,  the  episodes are filmed before a studio audience of two hundred or more, and the relocated television production incurs  (i)  at least thirty million dollars in annual production costs in the state, or (ii) at least ten million dollars in capital expenditures at a qualified production facility in the state.  (c)  Cross-references.  For  application of the credit provided for in this section, see the following provisions of this chapter:  (1) article 9-A: section 210-B: subdivision 20.  (2) article 22: section 606: subsection (gg).  (d)  Notwithstanding  any  provision  of  this  chapter, employees and officers of the governor's  office  of  motion  picture  and  television development  and  the  department  shall  be allowed and are directed to share and  exchange  information  regarding  the  credits  applied  for, allowed,  or  claimed  pursuant  to  this  section and taxpayers who are applying for credits or who are claiming credits, including  information contained  in  or  derived  from  credit  claim  forms  submitted to the department and applications  for  credit  submitted  to  the  governor's office of motion picture and television development.  (e)  Allocation  of  credit.  (1)  The aggregate amount of tax credits allowed under  this  section,  subdivision  thirty-six  of  section  two hundred  ten  and  subsection  (gg)  of  section six hundred six of this chapter in any calendar year shall be twenty-five million dollars in two thousand four and two  thousand  five,  sixty  million  dollars  in  two thousand  six  and two thousand seven, sixty-five million dollars in two thousand eight, seventy-five  million  dollars  in  two  thousand  nine, eighty-five  million dollars in two thousand ten, ninety million dollars in two thousand eleven and two thousand  twelve,  and  one  hundred  ten million  dollars  in  two  thousand  thirteen.  Such aggregate amount of credits shall be allocated by the governor's office for  motion  picture and  television  development  among taxpayers in order of priority based upon the date of filing an application for allocation of film production credit with such office.  If  the  total  amount  of  allocated  credits applied  for  in any particular year exceeds the aggregate amount of tax credits allowed for such year under this section, such excess  shall  be treated  as  having  been applied for on the first day of the subsequent year.  (2) The aggregate amount  of  tax  credits  allowed  pursuant  to  the authority  of  subdivision  (b)  of section twelve hundred one-a of this chapter in any calendar  year  shall  be  twelve  million  five  hundred thousand  dollars  in two thousand four and two thousand five and thirty million dollars in two thousand six through two  thousand  eleven.  Such aggregate  amount of credits shall be allocated by the mayor's office of film, theater and broadcasting among  taxpayers  in  order  of  priority based  upon  the  date  of  filing an application for allocation of film production credit with such office. If the  total  amount  of  allocated credits  applied for in any particular year exceeds the aggregate amount of tax credits allowed for such year under  this  section,  such  excess shall  be  treated  as  having  been applied for on the first day of the subsequent year.  (3) Additional pool 1 - The aggregate amount of tax credits allowed in subdivision (a) of this section shall  be  increased  by  an  additional three   hundred  fifty  million  dollars  in  two  thousand  nine.  This additional amount shall be allocated by the governor's office for motion picture and television development among taxpayers  in  accordance  with subdivision (a) of this section.   * (4)  Additional pool 2 - The aggregate amount of tax credits allowed in subdivision (a) of this section shall be increased by  an  additional four  hundred  twenty  million  dollars  in  each  year  starting in two thousand ten through two thousand  twenty-six  provided  however,  seven million  dollars  of  the  annual  allocation shall be available for the empire state film post production credit pursuant to section  thirty-one of  this  article in two thousand thirteen and two thousand fourteen and twenty-five million dollars of the annual allocation shall be  available  for  the  empire  state  film post production credit pursuant to section thirty-one of this article in each year starting in two thousand fifteen through two thousand twenty-six. This amount shall be allocated  by  the governor's  office  for  motion picture and television development among taxpayers in accordance with subdivision (a) of  this  section.  If  the commissioner  of  economic  development  determines  that  the aggregate amount of tax credits available from additional pool 2  for  the  empire state  film  production  tax  credit have been previously allocated, and determines that the pending applications from  eligible  applicants  for the  empire  state  film  post production tax credit pursuant to section thirty-one of this article is insufficient to  utilize  the  balance  of unallocated  empire  state  film  post  production tax credits from such pool, the remainder, after such  pending  applications  are  considered, shall  be  made  available  for  allocation in the empire state film tax credit pursuant to this  section,  subdivision  twenty  of  section  two hundred  ten-B  and  subsection  (gg) of section six hundred six of this chapter. Also, if the commissioner of  economic  development  determines that  the aggregate amount of tax credits available from additional pool 2 for the empire  state  film  post  production  tax  credit  have  been previously  allocated, and determines that the pending applications from eligible applicants for the empire  state  film  production  tax  credit pursuant  to  this  section  is  insufficient  to utilize the balance of unallocated film production tax credits from such pool, then all or part of the remainder, after such pending applications are considered,  shall be  made  available  for  allocation  for  the  empire  state  film post production credit pursuant to this section,  subdivision  thirty-two  of section two hundred ten-B and subsection (qq) of section six hundred six of this chapter. The governor's office for motion picture and television development  must  notify taxpayers of their allocation year and include the allocation year on the certificate of tax credit. Taxpayers eligible to claim a credit must report the  allocation  year  directly  on  their empire  state  film production credit tax form for each year a credit is claimed and include a copy of the certificate with their tax return.  In the case of a qualified film that receives funds from additional pool 2, no empire state film production credit shall be claimed before the later of the taxable year the production of the qualified film is complete, or the taxable year immediately following the allocation year for which the film  has  been  allocated  credit  by  the governor's office for motion picture and television development.   * NB Effective until the first of January next succeeding the date the department of economic development provides notice  to  the  legislative bill  drafting commission of a determination pursuant to § 6 sb 2 (b) of chapter 683 of 2019   * (4) Additional pool 2 - The aggregate amount of tax credits  allowed in  subdivision  (a) of this section shall be increased by an additional four hundred twenty  million  dollars  in  each  year  starting  in  two thousand  ten  through  two  thousand twenty-six provided however, seven million dollars of the annual allocation  shall  be  available  for  the empire  state film post production credit pursuant to section thirty-one of this article in two thousand  thirteen  and  two  thousand  fourteen, twenty-five  million dollars of the annual allocation shall be available for the empire state film post production  credit  pursuant  to  section thirty-one of this article in each year starting in two thousand fifteen through  two  thousand twenty-six and five million dollars of the annual allocation shall be made  available  for  the  television  writers'  and directors' fees and salaries credit pursuant to section twenty-four-b of this  article  in  each year starting in two thousand twenty through two thousand twenty-six. This amount shall be allocated  by  the  governor's  office  for motion picture and television development among taxpayers in accordance with subdivision (a) of this section. If the commissioner  of economic development determines that the aggregate amount of tax credits available  from  additional  pool 2 for the empire state film production tax credit have been  previously  allocated,  and  determines  that  the pending  applications from eligible applicants for the empire state film post production tax  credit  pursuant  to  section  thirty-one  of  this article  is  insufficient  to  utilize the balance of unallocated empire state film post production tax credits from such  pool,  the  remainder, after  such pending applications are considered, shall be made available for allocation in the empire state film  tax  credit  pursuant  to  this section,  subdivision twenty of section two hundred ten-B and subsection (gg)  of  section  six  hundred  six  of  this  chapter.  Also,  if  the commissioner  of  economic  development  determines  that  the aggregate amount of tax credits available from additional pool 2  for  the  empire state  film  post  production tax credit have been previously allocated, and determines that the pending applications  from  eligible  applicants for the empire state film production tax credit pursuant to this section is  insufficient  to  utilize the balance of unallocated film production tax credits from such pool, then all or part  of  the  remainder,  after such  pending  applications  are considered, shall be made available for allocation for the empire state film post production credit pursuant  to this  section,  subdivision  thirty-two of section two hundred ten-B and subsection (qq)  of  section  six  hundred  six  of  this  chapter.  The governor's  office  for  motion  picture and television development must notify taxpayers of their allocation year  and  include  the  allocation year  on  the  certificate  of tax credit. Taxpayers eligible to claim a credit must report the allocation year directly on  their  empire  state film  production  credit  tax form for each year a credit is claimed and include a copy of the certificate with their tax return. In the case  of a  qualified  film that receives funds from additional pool 2, no empire state film production credit shall be claimed before the  later  of  the taxable  year  the  production of the qualified film is complete, or the taxable year immediately following the allocation  year  for  which  the film  has  been  allocated  credit  by  the governor's office for motion picture and television development.   * NB Effective on the first of January next succeeding  the  date  the department  of  economic  development provides notice to the legislative bill drafting commission of a determination pursuant to § 6 sb 2 (b)  of chapter 683 of 2019  (f)  (1)  With regard to certificates of tax credit issued on or after January  first,  two  thousand  twenty,  the  commissioner  of  economic development  shall  reduce  by  one-quarter of one percent the amount of credit allowed to a taxpayer and this reduced amount shall  be  reported on  a  certificate of tax credit issued pursuant to this section and the regulations promulgated by the commissioner of economic  development  to implement this credit program.  (2) By January thirty-first of each year, the commissioner of economic development  shall  report  to  the comptroller the total amount of such reductions of tax credit during the immediately preceding calendar year. On or before March thirty-first of  each  year,  the  comptroller  shall transfer  without  appropriations  from  the  general fund to the empire state entertainment diversity job training development fund  established under  section  ninety-seven-ff of the state finance law an amount equal to the total amount of such reductions reported by the  commissioner  of economic development for the immediately preceding calendar year.  (3)  Notwithstanding  paragraph two of this subdivision, the following provisions shall apply with respect to reductions of tax credit  in  two  thousand  twenty.  (i)  The  commissioner  of economic development shall report to the comptroller by June first, two thousand twenty  the  total amount  of  such  reductions  of tax credit during the period of January first,  two  thousand twenty through May fifteenth, two thousand twenty. On or before July first, two  thousand  twenty,  the  comptroller  shall transfer  without  appropriations  from  the  general fund to the empire state entertainment diversity job training development  fund  an  amount equal   to   the  total  amount  of  such  reductions  reported  by  the commissioner of economic development for the period  of  January  first, two  thousand twenty through May fifteenth, two thousand twenty. (ii) By January thirty-first,  two  thousand  twenty-one,  the  commissioner  of economic development shall report to the comptroller the total amount of such  reductions  of  tax credit during the period of May sixteenth, two thousand twenty through December thirty-first, two thousand  twenty.  On or  before  March thirty-first, two thousand twenty-one, the comptroller shall transfer without appropriations  from  the  general  fund  to  the empire  state  entertainment  diversity job training development fund an amount equal to the total amount of  such  reductions  reported  by  the commissioner  of  economic  development for the period of May sixteenth, two thousand twenty through December thirty-first, two thousand twenty.