Relates to the empire state film production tax credit

Summary of provisions

Section 1 of this bill would amend Tax Law § 1201-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. This proposal would (1) reduce the City credit rate from five percent to four percent; (2) phase out the credit for television series: after three years of receiving the full credit, a television series would receive a three percent credit in year four of the program, a two percent credit in year five, and no credit thereafter; and (3) establish a cap of $250,000 in credits per qualified film or episode of a qualified television series; for those productions incurring more than 75t of their post production costs in New York City, the cap would be $300,000.

Section 2 of the bill provides that the law would take effect immediately and would apply to taxable years beginning on or after January 1, 2014, and to applications filed on or after such date.

Justification

Given the fiscal constraints facing the City, this legislation contains measures to better target the "Made in NY" film production credit in order to bolster its effectiveness as an incentive. These proposals embody a carefully crafted plan to cope with the fiscal challenges facing the City by sharing the sacrifices needed, while preserving the film production credit program as a viable incentive to attract film and television production to New York City. The legislation does 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.

The overall reduction of the City credit rate from five percent to four percent would limit the City's exposure to excessive program costs and allow for improved future fiscal planning. The television series phase-out would provide a credit for the first five years of a series, after which these successful and established television series would no longer be eligible for the credit. The per-production cap would preserve the full credit for independent features and for television series, which provide year-round employment, and a graduated percentage reduction for large-budget feature films.

The film and television industry is an important contributor to the City's economy and as such both the City and State have taken a number of important steps to provide it incentives. 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. The "Made in NY" film production tax credit, enacted in January 2005 and extended through 2019 in April 2013, combined with the State credit,

has been a major success in attracting film and television production to New York City. According to a study released by the Boston Consulting Group in May 2012, production spending for the film and television industry increased significantly since 2004, accounting for $7.1 billion in direct spending while providing tens of 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 incentive to the film and television industry. This extension of the program will ensure its continued success.

Legislative history

2012: S.2883/A5562 (Squadron/Englebright) 2010: S.5674/A.8761 (Schneiderman/Englebright)

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, 2014; provided further that this act shall apply to applications filed on or after January 1, 2014.