2023 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-nine.
(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