Relates to the empire state commercial production tax credit

BILL NUMBER:S4527A

Title of bill

An act to amend the tax law, in relation to empire state commercial production tax credit; and to amend section 8 of part V of chapter 62 of the laws of 2006 amending the tax law relating to the empire state commercial production tax credit

Purpose of bill

This bill would increase the current tax credit program from $7 million to $10 million, eliminate the sunset provision in the current program and allow for flexibility in accessing the three categories of tax credits.

Summary of specific provisions

Section one amends paragraph 2 of subdivision (a) of section 28 of the tax law by increasing the total dollars in tax credits from $7 to $10 million. section one also provides that, wherever there is any money remaining for the annual tax credit disbursement, such money shall be disbursed to all eligible production companies on a pro rata basis.

Section two amends section 8 of part V of a chapter of the laws of 2006 amending the tax law by increasing the aggregate amount of tax credits allowed under the tax law from $3 million to $4.5 million.

Section three provides an immediate effective date, with applicability to taxable years beginning on and after January 1, 2011.

Justification

New York state offers a fully refundable tax credit, known as the Empire state Commercial production Tax Credit, to qualified commercial production companies shooting commercials within the state. The credit is available to companies that are directly responsible for the payment of direct production expenses and are the signatory to contracts with the payroll service, facilities, vendors, etc. utilized in the production of commercials.

This essential credit, which lured business back to New York state after losing it to competing tax credits in New Jersey and Connecticut, expires in 2011. If this credit were to sunset, it would be an economic detriment to New York State, as it brings jobs and tax revenue to the State of New York and keeps New York competitive in the commercial production industry.

Since the creation of this credit, commercial filming in New York State has shown improvement. In 2005 (prior to the existence of the tax credit), 12% of shoot days took place in New York. Data collected in 2010 shows that 16% of all shoot days now take place in New York, an increase that is attributed to the formation of the Empire state commercial production Tax Credit.

Prior legislative history

New Bill.

Fiscal implications

This legislation will create new jobs in the State.

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2011.