What's happening
This bill creates a tax credit program for digital gaming media production in New York, with regional allocations and reporting requirements.
Why it matters
Targets Game Development Jobs & Investment Statewide. By offering a 25% tax credit (plus an extra 10% outside the NYC metro area) on eligible production costs, the bill aims to attract and retain digital gaming companies and high-skill jobs, particularly in upstate and less developed regions.
Promotes Regional Equity in Tech Incentives. The bill divides the total credits ($50 million/year) among three regions (NYC, suburbs, and the rest of the state), ensuring that game industry growth and benefits are not concentrated solely in New York City but shared across the state.
Establishes Strict Eligibility & Accountability Criteria. Only productions with significant in-state spending qualify, and costs like executive salaries and marketing are excluded to focus credits on direct content creation. The bill also mandates detailed biannual and triennial public reporting, including project-level data, employment numbers, and third-party audits to monitor outcomes and prevent abuse.
Sets a Time-Limited, Data-Driven Pilot. With a five-year sunset and regular reporting requirements, the program is designed as a trial, enabling lawmakers to assess real economic impacts, regional effects, and cost-effectiveness before deciding on renewal or expansion.
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Who cares
Headline styles
Tax Credit for Game Makers
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to budget and revenue
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Give Video Game Tax Credits
In Assembly Committee · Ways And Means · Sponsor John T. McDonald III
Full text
5 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6882
2019-2020 Regular Sessions
IN SENATE
December 4, 2019
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the tax law and the economic development law, in relation to the creation of the empire state digital gaming media production credit; and providing for the repeal of certain provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 45 to read as follows:
§ 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.
(2) 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 or limited liability company) of twenty-five percent and the eligible production costs of one or more qualified digital gaming media productions.
(3) Eligible 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 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) Eligible 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 or allowed in any other state.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14111-02-9
S. 6882 2
(b) Allocation of credit. The aggregate amount of tax credits allowed under this section, subdivision fifty-four of section two hundred ten-B and subsection (kkk) of section six hundred six of this chapter in any taxable year shall be fifty million dollars. The aggregate amount of credits for any taxable year must be distributed on a regional basis as follows: twenty-five percent of the aggregate amount of credits shall be available for qualified digital gaming media productions that incur at least sixty percent of eligible production costs for a qualified digital gaming media production in region one; ten percent of the aggregate amount of credits shall be available for qualified digital gaming media productions that incur at least sixty percent of eligible production costs for a qualified digital gaming media production in region two; and sixty-five percent of the aggregate amount of credits shall be available for qualified digital gaming media productions that incur at least sixty percent of eligible production costs for a qualified digital gaming media production in region three. If such regional distribution is not fully allocated in any taxable year, the remainder of such credits shall be available for allocation to any region in the subsequent tax year. For the purposes of this section region one shall contain the city of New York; region two shall contain the counties of Westchester, Rockland, Nassau and Suffolk; and region three shall contain any county not contained in regions one and two. Such credit shall be allocated by the empire state development corporation among taxpayers 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; (iii) animation, simulation or embedded graphics digital gaming related software intended for commercial distribution regardless of medium; and (iv) a digital gaming media production in which qualified digital gaming media production costs equal to or are in excess of seven thousand five hundred dollars if incurred and paid in this state in twelve months preceding the date on which the credit is claimed. Provided, however, if such production costs are incurred and paid outside the metropolitan commuter transportation district in this state, such production costs shall be equal to or in excess of three thousand seven hundred fifty dollars to be a qualified digital gaming media production for purposes of this paragraph. 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 or interactive games), gambling (including activities regulated by a New York gaming agency), exclusive local consumption for entities not accessible by the general public including industrial or other private purposes, and political advocacy purposes.
S. 6882 3
(2) "Digital gaming media production costs" means any costs for property used and wages or salaries paid to individuals directly employed for services performed by those individuals directly and predominantly in the creation of a digital gaming media production or productions. Digital gaming media production costs include but shall not be limited to payments for property used and 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 or other costs not directly and predominantly related to the creation, production or modification of digital gaming media. 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. Furthermore, any income or other distribution to any individual who holds an ownership interest in a digital gaming media production entity shall not be included as digital gaming media production costs.
(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.
(d) 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-four.
(2) Article twenty-two: section six hundred six, subsection (i), paragraph one, subparagraph (B), clause (xlv).
(3) Article twenty-two: section six hundred six, subsection (kkk).
§ 2. Section 210-B of the tax law is amended by adding a new subdivision 54 to read as follows:
54. Empire state digital gaming media production credit. (a) Allowance of credit. A taxpayer who is eligible pursuant to section forty-five of this chapter shall be allowed a credit to be computed as provided in such section forty-five against the tax imposed by this article.
(b) Application of credit. The credit allowed under this subdivision for any taxable year shall not reduce the tax due for such year to less than the amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. Provided, however, that if the amount of the credit allowable under this subdivision for any taxable year reduces the tax to such amount, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter, provided, however, no interest shall be paid thereon.
§ 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xlv) to read as follows:
S. 6882 4
(xlv) Empire state digital Amount of credit gaming media production under subdivision credit under subsection (kkk) fifty-four of section
two hundred ten-B
§ 4. Section 606 of the tax law is amended by adding a new subsection (kkk) to read as follows:
(kkk) Empire state digital gaming media production credit. (1) Allowance of credit. A taxpayer who is eligible pursuant to section fortyfive of this chapter shall be allowed a credit to be computed as provided in such section forty-five against the tax imposed by this article.
(2) Application of credit. If the amount of the credit allowable under this subsection for any taxable year exceeds the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon.
§ 5. The state commissioner of economic development, after consulting with the state commissioner of taxation and finance, shall promulgate regulations by December 31, 2020 to establish procedures for the allocation of tax credits as required by subdivision (a) of section 45 of the tax law. Such rules and regulations shall include provisions describing the application process, the due dates for such applications, the standards which shall be used to evaluate the applications, the documentation that will be provided to taxpayers substantiate to the New York state department of taxation and finance the amount of tax credits allocated to such taxpayers, under what conditions all or a portion of this tax credit may be revoked, and such other provisions as deemed necessary and appropriate. Notwithstanding any other provisions to the contrary in the state administrative procedure act, such rules and regulations may be adopted on an emergency basis if necessary to meet such December 31, 2020 deadline.
§ 6. The economic development law is amended by adding a new section 242 to read as follows:
§ 242. Reports on the digital gaming industries in New York. 1. The empire state development corporation shall file a report on a biannual basis with the director of the division of the budget and the chairpersons of the assembly ways and means committee and senate finance committee. The report shall be filed no later than thirty days before the mid-point and the end of the state fiscal year. The first report shall cover the calendar half year that begins on January first, two thousand twenty-two. Each report must contain the following information for the covered calendar half year:
(a) the total dollar amount of credits allocated pursuant to section forty-five of the tax law during the half year, broken down by month;
(b) the number of digital gaming projects, which have been allocated tax credits of less than one million dollars per project, and the total dollar amount of credits allocated to those projects distributed by region pursuant to subdivision (b) of section forty-five of the tax law;
(c) the number of digital gaming projects, which have been allocated tax credits of more than one million dollars, and the total dollar amount of credits allocated to those projects distributed by region pursuant to subdivision (b) of section forty-five of the tax law;
(d) a list of each eligible digital gaming project, which has been allocated a tax credit enumerated by region pursuant to subdivision (b) of section forty-five of the tax law, and for each of those projects, (i) the estimated number of employees associated with the project, (ii)
S. 6882 5
the estimated qualifying costs for the projects, (iii) the estimated total costs of the project, (iv) the credit eligible employee hours for each project, and (v) total wages for such credit eligible employee hours for each project; and
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law and the economic development law, in relation to the creation of the empire state digital gaming media production credit; and providing for the repeal of certain provisions upon expiration thereof
Purpose of the bill
To remake the digital media gaming adopted in Part K of chapter 59 of the laws of 2015 (Revenue Bill A.3009-B) into a "below-the-line" production credit This will allow the industry to accurately calculate the benefits of the programs, allow the State to better monitor the credits, and to ease access to the incentives.
Summary of specific provisions
Section one creates a new section forty-four in the Tax Law to provide a production incentive for the creation of video gaming in New York.
Read the full memo (938 words)
Subdivision (a) lays out eligibility criteria for companies that file under the corporate franchise or personal income taxes.
Subdivision (b) limits the annual amount of refundable credits available under the program to no more than $50 million a year, allocates the available credits to three regions of the state, namely New York City, the metro New York suburbs and Upstate. A project must perform at least 60 percent of eligible costs within a region to qualify for credits in that region.
Subdivision (c) defines eligible "below the line" costs and qualified productions. Sections 2, 3 and 4 establish the credit in Articles 9-A and 22 of the Tax Law.
Section 5 authorizes the Commissioner of Economic Development to estab- lish corresponding regulations and procedures to allow for the effective administration of the credit.
Section 6 creates a new section 243 in the economic development law for reporting requirements for the new program. Reports will be filed by ESDC on a biannual basis to be sent to the Director of the Budget and the fiscal chairs of the legislature. The reports must detail the amount of credits claimed and paid, the number of projects by size and region, and the name of the taxpayer or taxpaying entity receiving the credits.
In addition, every third year ESDC will be required to produce and pres- ent a report to the Executive and the Legislature prepared by an inde- pendent third party on how the programs are operating and the overall economic impact of the program on the State economy.
Section 7 contains the effective date of the act and a five-year sunset to the programs.
Justification
This bill is designed to provide meaningful and effective incentives to an industry critical to future economic development throughout the State. The bill supports production activities occurring for digital gaming in the State similar to the support New York provides to the film industry. New York currently generates a small portion of the approxi- mately $43 billion U.S. video and digital gaming market. It is fore- casted that the global market will grow 27% by 2026, according to Zion Market Research. If New York is to capture a larger share of this grow- ing market a functioning incentive program is critical as other states and counties offer aggressive incentives to this industry. Not only does the video game industry have a substantial economic impact that is even greater than the film industry, the industry is deeply rooted in the communities throughout the state. Box office revenue for the United States was $11.9 billion in 2018. The video game industry brought in $43.4 billion in U.S. revenue for the same year (according to the Enter- tainment Software Association). This is an investment in the future of the State of New York to make this state a leader throughout the country in growing this rapidly growing industry.
New York is undoubtedly the home of the most creative individuals in the industry, and graduates the finest game developers anywhere. We need robust and accessible programs to encourage these creative geniuses to work and perform in the state, to call New York their home, and to aid an industry that has a potential for exponential growth both in Down- state and Upstate.
Aiding the video and other digital gaming industry through the Excelsior program in practice had led to a limited use of the credit, if any. No one in the industry is aware of any claims in credits for the industry since it became eligible. Consequently, the industry has approached the Legislature for a different, more strategic and accessible program. Something that works for the industry but also, since it is a tax cred- it, something that works for New Yorkers, knowing that a fraction of revenue gained by the state of New York will be credited back to the industry.
This bill has received support from the video and digital gaming indus- try. The bill provides for true "below the line" production credits that will drive industry growth in New York and create employment while not providing taxpayer funds for "owners and directors". It is important to note that the video game credit is not intended to and does not benefit executive level salaries and instead is focused on boosting employees at a middle income. In recognition of State budget challenges, the credit is capped at $50 million a year.
The bill also provides for stringent reporting requirements to determine if the incentives will produce significant company revenue and permanent employment growth in the State.
Prior legislative history
2016: S.7485-B - veto memo 255.
Fiscal implications
Up to $50 million a year in tax expenditures.
Effective date
Immediately and shall apply to taxable years beginning on or after Janu- ary 1, 2020, and will be deemed to expire and be repealed on December 31, 2024.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.