2023 New York Laws › TAX - Tax › Article 1 - Short Title; Definitions; Miscellaneous › 45 - Empire State Digital Gaming Media Production Credit.

§  45.  Empire  state  digital  gaming  media  production  credit. (a)
Allowance of credit. (1) A taxpayer which  is  a  digital  gaming  media
production  entity engaged in qualified digital gaming media production,
or who is a sole proprietor of or a member of a partnership, which is  a
digital  gaming  media  production  entity  engaged in qualified digital
gaming media production, and is subject to tax under article  nine-A  or
twenty-two  of  this chapter, shall be allowed a credit against such tax
to be computed as provided herein for  taxable  years  beginning  on  or
after January first, two thousand twenty-three and before January first,
two thousand twenty-eight.
(2)  The  amount of the credit shall be the product (or pro rata share
of the product, in the case  of  a  taxpayer  who  is  a  partner  in  a
partnership,  member  of a limited liability company or shareholder in a
subchapter S corporation)  of  twenty-five  percent  and  the  qualified
digital  gaming  media production costs of one or more qualified digital
gaming media productions.
(3) Qualified digital gaming media production costs  for  a  qualified
digital  gaming  media  production  incurred  and paid in this state but
outside such metropolitan commuter transportation district as defined in
section twelve hundred sixty-two of the public authorities law shall  be
eligible  for  a credit of ten percent of such eligible production costs
in  addition  to  the  credit  specified  in  paragraph  two   of   this
subdivision.
(4)  All  applicants  to  this program are required, as a condition of
receiving the credit, to include in the credits  of  each  digital  game
development  media  production language and a logo to be provided by the
governor's  office  of  motion  picture   and   television   development
acknowledging the state's role in the creation of the production.
(5)  A  qualified digital gaming media production that has applied for
credit under the provisions of this section shall, as  a  condition  for
the granting of the credit, file a diversity plan with the department of
economic  development  outlining  specific  goals  for  hiring a diverse
workforce. The commissioner of  economic  development  shall  promulgate
regulations  implementing  the  requirements  of  this paragraph, which,
notwithstanding  any  provisions  to   the   contrary   in   the   state
administrative  procedure  act, may be adopted on an emergency basis, to
ensure compliance with the provisions of this paragraph. The  department
of  economic  development shall review each submitted plan as to whether
it meets the requirements established by the  commissioner  of  economic
development,  and  shall  verify  that  the  applicant  has  met or made
good-faith efforts in achieving these goals.
(b) Allocation of credit. The aggregate amount of tax credits  allowed
under  this section, subdivision fifty-five of section two hundred ten-B
and subsection (nnn) of section six hundred six of this chapter  in  any
taxable  year  shall  be  five  million  dollars.  Such  credit shall be
allocated by the department of economic development in order of priority
based upon the date of filing an application for allocation  of  digital
gaming  media 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 taxable year.
(c) Definitions. As used in this section:
(1)  "Qualified digital gaming media production" means: (i) a website,
the digital media  production  costs  of  which  are  paid  or  incurred
predominately  in connection with (A) video simulation, animation, text,
audio, graphics or similar gaming related property embodied  in  digital
format,  and  (B)  interactive  features of digital gaming (e.g., links,

message boards, communities or  content  manipulation);  (ii)  video  or
interactive games produced primarily for distribution over the internet,
wireless  network or successors thereto; and (iii) animation, simulation
or  embedded  graphics  digital  gaming  related  software  intended for
commercial distribution regardless of medium;  provided,  however,  that
the  qualified  digital  game development media productions described in
subparagraphs (i) through (iii) of  this  paragraph  must  have  digital
media  production  costs  equal  to or in excess of one hundred thousand
dollars per production. A qualified digital gaming media production does
not include a website, video, interactive game or software that is  used
predominately  for:  electronic  commerce  (retail or wholesale purposes
other than the sale of video  interactive  games),  gambling  (including
activities regulated by a New York gaming agency), or political advocacy
purposes.
(2)  "Digital gaming media production costs" means any costs for wages
or salaries paid to individuals, other than actors or writers,  directly
employed  for  services  performed  by  those  individuals  directly and
predominantly in the creation of a digital gaming  media  production  or
productions.  Up  to  one hundred thousand dollars in wages and salaries
paid to such employees, other than actors and writers, directly employed
shall be used in the calculation of this credit.  Digital  gaming  media
production  costs  include  but  shall  not  be  limited to payments for
services  performed  directly  and  predominantly  in  the   development
(including  concept  creation),  design,  production  (including concept
creation), design, production (including  testing),  editing  (including
encoding)  and  compositing  (including the integration of digital files
for interaction by end users) of digital gaming  media.  Digital  gaming
media  production  costs  shall  not  include  expenses incurred for the
distribution, marketing, promotion, or advertising content generated  by
end  users,  other  costs  not directly and predominantly related to the
creation, production or modification of digital gaming  media  or  costs
used  by  the  taxpayer  as  a basis of the calculation of any other tax
credit allowed under this chapter. In addition, salaries or other income
distribution related to the creation of digital  gaming  media  for  any
person  who  serves  in  the  role  of  chief  executive  officer, chief
financial officer, president, treasurer or similar position shall not be
included as digital gaming media production costs if the digital  gaming
media  production  entity has more then ten employees. Salaries or other
income to a person serving in such a role for the digital  gaming  media
production  entity shall also not be included if the person was employed
by a related person of the digital gaming media production entity within
sixty months of the date the  digital  gaming  media  production  entity
applied  for  the tax credit certificate described in subdivision (d) of
this section. For purposes of the preceding sentence, a  related  person
shall have the same meaning as the term "related person" in section four
hundred sixty-five of the internal revenue code. Furthermore, any income
or  other  distribution to any individual including, but not limited to,
licensing or royalty fees, who holds an ownership interest in a  digital
gaming  media  production  entity,  whether  or  not  such individual is
serving in the role of chief executive officer, chief financial officer,
president, treasurer or similar position for such an entity,  shall  not
be included as digital gaming media production costs. Up to four million
dollars   in   qualified  digital  gaming  media  production  costs  per
production shall be used in the  calculation  of  this  credit.  Digital
gaming  media production costs shall not include those costs used by the
taxpayer or another taxpayer as the basis calculation of any  other  tax
credit allowed under this chapter.
(3)  "Qualified  digital  gaming media production costs" means digital
gaming media  production  costs  only  to  the  extent  such  costs  are
attributable  to  the  use of property or the performance of services by
any persons within the state directly and predominantly in the creation,
production  or  modification of digital gaming related media. Such total
production costs incurred and paid in this state shall be  equal  to  or
exceed  seventy-five  percent  of  total  cost of an eligible production
incurred and paid within and without this state.
(4) "Digital gaming media  production  entity"  means  a  corporation,
partnership,  limited  partnership or other entity or individual engaged
in qualified digital game development media production.
(d)  To  be  eligible  for  the  empire  state  digital  gaming  media
production  credit, the taxpayer shall have been issued a certificate of
tax credit by the department of economic development, which  certificate
shall  set  forth  the  amount of the credit that may be claimed and the
taxable year in which it shall be claimed. The taxpayer shall be allowed
to claim only the amount listed on the certificate  of  tax  credit  for
that  taxable  year.  In  order  to properly administer this credit, the
department shall be allowed to exchange information with the  department
of  economic  development  about  the  taxpayers  claiming  this credit,
including information about the tax credits claimed. A taxpayer that  is
a  partner  in  a  partnership, member of a limited liability company or
shareholder  in  a  subchapter  S  corporation  that  has   received   a
certificate  of  tax  credit  shall be allowed its pro rata share of the
credit  earned  by  the  partnership,  limited  liability   company   or
subchapter S corporation. The taxpayer shall claim the tax credit in the
taxable  year  that  begins in the year for which it is allocated credit
under this section.
(e) Cross-references. For application of the credit  provided  for  in
this section, see the following provisions of this chapter:
(1) Article nine-A: section two hundred ten-B, subdivision fifty-five.
(2)  Article  twenty-two:  section  six  hundred  six, subsection (i),
paragraph one, subparagraph (B), clause (xlvi).
(3) Article twenty-two: section six hundred six, subsection (nnn).