N.Y. Tax Law § 24-D — Empire state independent film production credit

§ 24-d. Empire state independent film production credit. (a) (1)\nAllowance of credit. A taxpayer which is a qualified independent film\nproduction company, or which is a sole proprietor of or a member of a\npartnership which is a qualified independent film production company,\nand which is subject to tax under articles nine-A or twenty-two of this\nchapter, shall be allowed a credit against such tax, pursuant to the\nprovisions referenced in subdivision (c) of this section, to be computed\nas hereinafter provided.\n (2) (i) The amount of the credit shall be the product (or pro rata\nshare of the product, in the case of a member of a partnership) of\nthirty percent and the qualified production costs paid or incurred in\nthe production of a qualified film, provided that the qualified\nproduction costs (excluding post production costs) paid or incurred\nwhich are attributable to the use of tangible property or the\nperformance of services at a qualified film production facility in the\nproduction of such qualified film equal or exceed seventy-five percent\nof the production costs (excluding post production costs) paid or\nincurred which are attributable to the use of tangible property or the\nperformance of services at any film production facility within and\nwithout the state in the production of such qualified film. However, if\nthe qualified production costs (excluding post production costs) which\nare attributable to the use of tangible property or the performance of\nservices at a qualified film production facility in the production of\nsuch qualified film is less than three million dollars, then the portion\nof the qualified production costs attributable to the use of tangible\nproperty or the performance of services in the production of such\nqualified film outside of a qualified film production facility shall be\nallowed only if the shooting days spent in New York outside of a film\nproduction facility in the production of such qualified film equal or\nexceed seventy-five percent of the total shooting days spent within and\nwithout the state outside of a film production facility in the\nproduction of such qualified film. The credit shall be allowed for the\ntaxable year in which the production of such qualified film is\ncompleted. A taxpayer shall not be eligible for a tax credit established\nby this section for the production of more than two qualified films per\ncalendar year.\n (ii) In addition to the amount of credit established in subparagraph\n(i) of this paragraph, a taxpayer shall be allowed a credit equal to (A)\nthe product (or pro rata share of the product, in the case of a member\nof a partnership) of ten percent and the wages, salaries or other\ncompensation constituting qualified production costs as defined in\nparagraph one of subdivision (b) of this section, paid to individuals\ndirectly employed by a qualified independent film production company for\nservices performed by those individuals in one of the counties specified\nin this subparagraph in connection with a qualified independent film\nwith a minimum budget of five hundred thousand dollars, and (B) the\nproduct (or pro rata share of the product, in the case of a member of a\npartnership) of ten percent and the qualified production costs\n(excluding wages, salaries or other compensation) paid or incurred in\nthe production of a qualified film where the property constituting such\nqualified production costs was used, and the services constituting such\nqualified production costs were performed in any of the counties\nspecified in this subparagraph in connection with a qualified film with\na minimum budget of five hundred thousand dollars where the majority of\nprincipal photography shooting days in the production of such film were\nshot in any of the counties specified in this paragraph. Provided,\nhowever, that the aggregate total eligible qualified production costs\nconstituting wages, salaries or other compensation, for writers,\ndirectors, composers, producers, and performers shall not exceed forty\npercent of the aggregate sum total of all other qualified production\ncosts. For purposes of the credit, the services must be performed and\nthe property must be used in one or more of the following counties:\nAlbany, Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung,\nChenango, Clinton, Columbia, Cortland, Delaware, Dutchess, Erie, Essex,\nFranklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis,\nLivingston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga,\nOntario, Orange, Orleans, Oswego, Otsego, Putnam, Rensselaer, Saratoga,\nSchenectady, Schoharie, Schuyler, Seneca, St. Lawrence, Steuben,\nSullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Wyoming,\nor Yates and (C) qualified production costs that are attributable to\nscoring shall be eligible for an additional ten percent credit on such\nscoring costs when incurred within the state and when such scoring costs\ninclude payment to a minimum of five musicians.\n (3) No qualified production costs used by a taxpayer either as the\nbasis for the allowance of the credit provided for under this section or\nused in the calculation of the credit provided for under this section\nshall be used by such taxpayer to claim any other credit allowed\npursuant to this chapter.\n (4) Notwithstanding the foregoing provisions of this subdivision, a\nqualified independent film production company that has applied for\ncredit under the provisions of this section, agrees as a condition for\nthe granting of the credit: (i) to include in each qualified film\ndistributed by DVD, or other media for the secondary market, a New York\npromotional video approved by the governor's office of motion picture\nand television development or to include in the end credits of each\nqualified film "Filmed With the Support of the New York State Governor's\nOffice of Motion Picture and Television Development" and a logo provided\nby the governor's office of motion picture and television development,\nand (ii) to certify that it will purchase taxable tangible property and\nservices, defined as qualified production costs pursuant to paragraph\none of subdivision (b) of this section, only from companies registered\nto collect and remit state and local sales and use taxes pursuant to\narticles twenty-eight and twenty-nine of this chapter.\n (b) Definitions. As used in this section, the following terms shall\nhave the following meanings:\n (1) "Qualified production costs" means production costs only to the\nextent such costs, excluding labor costs, do not exceed sixty million\ndollars and are attributable to the use of tangible property or the\nperformance of services within the state directly and predominantly in\nthe production (including pre-production and post production) of a\nqualified film. In the case of an eligible relocated television series,\nthe term "qualified production costs" shall include, in the first season\nthat the eligible relocated television series is produced in New York\nafter relocation, qualified relocation costs. Provided, however, that\nthe aggregate total eligible qualified production costs for producers,\nwriters, directors, performers (other than background actors with no\nscripted lines), and composers shall not exceed forty percent of the\naggregate sum total of all other qualified production costs.\n (2) "Production costs" means any costs for tangible property used and\nservices performed directly and predominantly in the production\n(including pre-production and post production) of a qualified film.\n"Production costs" shall not include costs for a story, script or\nscenario to be used for a qualified film. "Production costs" generally\ninclude writers, directors, composers and performers, technical and crew\nproduction costs, such as expenditures for film production facilities,\nor any part thereof, props, makeup, wardrobe, film processing, camera,\nsound recording, scoring, set construction, lighting, shooting, editing\nand meals.\n (3) "Qualified film" means a scripted narrative feature-length film,\ntelevision film, relocated television series or television series,\nregardless of the medium by means of which the film or series is created\nor conveyed. For the purposes of the credit provided by this section\nonly, a "qualified film" whose majority of principal photography\nshooting days in the production of the qualified film are shot in\nWestchester, Rockland, Nassau, or Suffolk county or any of the five New\nYork City boroughs shall have a minimum budget of one million dollars. A\n"qualified film", whose majority of principal photography shooting days\nin the production of the qualified film are shot in any other county of\nthe state than those listed in the preceding sentence shall have a\nminimum budget of two hundred fifty thousand dollars. "Qualified film"\nshall not include: (i) a television pilot, documentary film, news or\ncurrent affairs program, interview or talk program, "how-to" (i.e.,\ninstructional) film or program, film or program consisting primarily of\nstock footage, sporting event or sporting program, game show, award\nceremony, film or program intended primarily for industrial, corporate\nor institutional end-users, fundraising film or program, daytime drama\n(i.e., daytime "soap opera"), commercials, music videos or "reality"\nprogram; (ii) a production for which records are required under section\n2257 of title 18, United States code, to be maintained with respect to\nany performer in such production (reporting of books, films, etc. with\nrespect to sexually explicit conduct); or (iii) a television series\ncommonly known as variety entertainment, variety sketch and variety\ntalk, i.e., a program with components of improvisational or scripted\ncontent (monologues, sketches, interviews), either exclusively or in\ncombination with other entertainment elements such as musical\nperformances, dancing, cooking, crafts, pranks, stunts, and games and\nwhich may be further defined in regulations of the commissioner of\neconomic development.\n (4) "Film production facility" shall mean a building and/or complex of\nbuildings and their improvements and associated back-lot facilities in\nwhich films are or are intended to be regularly produced and which\ncontain at least one sound stage, provided, however, that an armory\nowned by the state or city of New York located in the city of New York\nshall not be considered to be a "film production facility" unless such\nfacility is used by a qualified independent film production company.\n (5) "Qualified film production facility" shall mean a film production\nfacility in the state, which contains at least one sound stage having a\nminimum of seven thousand square feet of contiguous production space.\n (6) "Qualified independent film production company" is a corporation,\npartnership, limited partnership, or other entity or individual, that or\nwho (i) is principally engaged in the production of a qualified film,\n(ii) is not publicly traded, and (iii) is not majority owned, fifty-one\npercent or more, by a company publicly traded on a United States stock\nexchange.\n (7) "Relocated television series" shall mean the first two years of a\nregularly occurring production intended to run in its initial broadcast,\nregardless of the medium or mode of its distribution, in a series of\nnarrative and/or thematically related episodes, each of which has a\nrunning time of at least thirty minutes in length (inclusive of\ncommercial advertisement and interstitial programming, if any), which\nhad filmed a minimum of six episodes of the television series outside\nthe state immediately prior to relocating to the state, where the\ntelevision series had a total minimum budget of at least one million\ndollars per episode. For the purposes of this definition only, a\ntelevision series produced by and for media services providers described\nas streaming services and/or digital platforms (and excluding\nnetwork/cable) shall mean a regularly occurring production intended to\nrun in its initial release in a series of narrative and/or thematically\nrelated episodes, the aggregate length of which is at least seventy-five\nminutes, although the episodes themselves may vary in duration from the\nthirty minutes specified for network/cable production.\n (8) "Qualified relocation costs" means the costs incurred, excluding\nwages, salaries and other compensation, in the first season that a\nrelocated television series relocates to New York, including such costs\nincurred to transport sets, props and wardrobe to New York and other\ncosts as determined by the department of economic development to the\nextent such costs do not exceed six million dollars.\n (9) If the total amount of allocated credits applied for in any\nparticular year is less than the aggregate amount of tax credits allowed\nfor such year under this section, any unused portion may be carried over\nand added to the aggregate amount of credits allowed in the next\nsucceeding taxable year or years.\n (c) Cross-references. For application of the credit provided for in\nthis section, see the following provisions of this chapter:\n (1) article 9-A: section 210-B: subdivision 20-a.\n (2) article 22: section 606: subsection (gg-1).\n (d) Notwithstanding any provision of this chapter, employees and\nofficers of the governor's office of motion picture and television\ndevelopment and the department shall be allowed and are directed to\nshare and exchange information regarding the credits applied for,\nallowed, or claimed pursuant to this section and taxpayers who are\napplying for credits or who are claiming credits, including information\ncontained in or derived from credit claim forms submitted to the\ndepartment and applications for credit submitted to the governor's\noffice of motion picture and television development.\n (e) Allocation of credit. The aggregate amount of tax credits allowed\nunder this section, subdivision twenty-a of section two hundred ten and\nsubsection (gg-1) of section six hundred six of this chapter in any\ncalendar year shall be (1) twenty million dollars for qualified films\nwith a budget of less than ten million dollars of qualified production\ncosts; and (2) eighty million dollars for qualified films with a budget\nof ten million dollars or more of qualified production costs. There\nshall be at least two application periods each year; such aggregate\namount of credits shall be allocated by the governor's office for motion\npicture and television development among taxpayers in order of priority\nbased upon the date of filing of an application for allocation of the\nindependent film production credit with such office within each\napplication period. If the commissioner of economic development\ndetermines that the aggregate amount of tax credits available for an\napplication period under paragraph one of this subdivision have been\npreviously allocated, and determines that the pending applications from\neligible applicants for the other application period in such calendar\nyear is insufficient to utilize the balance of unallocated tax credits\nfor such period, then such commissioner may allocate to productions\neligible under such paragraph any credits that remain unallocated for\nsuch period pursuant to paragraph two of this subdivision. Provided,\nhowever, the total amount of allocated credits applied in any calendar\nyear shall not exceed the aggregate amount of tax credits allowed for\nsuch year under this section.\n (f) (1) The commissioner of economic development shall reduce by\none-half of one percent the amount of credit allowed to a taxpayer and\nthis reduced amount shall be reported on a certificate of tax credit\nissued pursuant to this section and the regulations promulgated by the\ncommissioner of economic development to implement this credit program.\n (2) By January thirty-first of each year, the commissioner of economic\ndevelopment shall report to the comptroller the total amount of such\nreductions of tax credit during the immediately preceding calendar year.\nOn or before March thirty-first of each year, the comptroller shall\ntransfer without appropriations from the general fund to the empire\nstate entertainment diversity job training development fund established\nunder section ninety-seven-ff of the state finance law an amount equal\nto the total amount of such reductions reported by the commissioner of\neconomic development for the immediately preceding calendar year.\n (g) Credit recapture. If a certificate of tax credit issued by the\ndepartment of economic development pursuant to this section is revoked\nby such department because the taxpayer does not meet the eligibility\nrequirements of this section, the amount of credit described in this\nsection and claimed by the taxpayer prior to that revocation shall be\nadded back to tax in the taxable year in which any such revocation\nbecomes final.\n