Authorizes additional tax credits for certain costs incurred in film and television productions in N.Y. city

Summary of provisions

Section 1 of this bill would amend Tax Law 51201-a(b), the section that authorizes the City of New York to amend its General Corporation Tax ("GCT") and its Unincorporated Business Tax ("UBT") with respect to the Empire State Film Production Credit, to add the term "qualified independent film production company", which is defined therein, to the category of taxpayer's entitled to the credit.

Section 2 of the bill would amend section 7(b)of part P of Chapter 60 of the Laws of 2004, as amended, to increase the aggregate amount of the tax credits allowed by the City of New York to be increased by an addi- tional $24 million a year in 2009, 2010 and 2011. Such additional credit amounts authorized may not be claimed by a taxpayer before taxable years beginning on or after January 1, 2011. Further notwithstanding the year to which such additional credits are allocated by the Mayor's film office, only $24 million can be claimed in a given year. Credits author- ized and allowed in excess of $24 million in a given year may be claimed in the subsequent year.

Notwithstanding the foregoing limitations, a taxpayer which is a quali- fied independent film production company may claim credits up to $250,000 per qualified film allocated to it in, the: taxable year in which the production of the qualified film is completed.

Section 3 of the bill provides that the law would take effect immediate- ly and would apply to taxable years beginning on or after January 1, 2009.

Justification

As part of the 2009-2010 State budget, the Empire State Film Production Credit program was provided an additional $350 million in State funding. That legislation did not apply to that portion of the program that is particular to New York City, which has been enacted through the City's GCT and the UBT. This bill will secure funding for the "Made in NY" film production credit through the end of 2011. Given the fiscal constraints facing the City, this legislation contains meas- ures to enhance the program's effectiveness as an incentive and to better target the tax credit by deferring the cost of the additional credits to tax years beginning on or after January 1, 2011.

Both the City and State have taken a number of important steps to provide incentives to the film and television industry, because it is an important contributor to the City's economy. The New York City's Mayor's

Office of Film, Theatre & Broadcasting has dramatically enhanced the range of services that it offers to the industry. Combined with the State credit, the "Made in NY" film production tax credit, enacted in January 2005, has been a major success in attracting film and television production to New York City. Production spending or qualifying film and television projects increased significantly since 2004, accounting for an additional $5 billion in direct spending while providing thousands of additional jobs. These increases were evident in all production areas: feature films, independent films, television series and pilots.

Through the "Made in NY" film production tax credit, New York City is the only municipality in the United States offering a tax credit incen- tive to the film and television industry. This extension of the program will ensure its continued success.

Legislative history

New Legislation.

Fiscal implications

No new fiscal implications to the State.

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2009.