Relates to eligibility for the empire state film post production credit; provides for eligibility for the credit if expenditures meet or exceed seventy-five percent of qualified expenditures, including picture and sound post production costs, music and visual effects; defines "picture and sound post production," "music," and "visual effects."
Sponsor: GOLDEN Committee: INVESTIGATIONS AND GOVERNMENT OPERATIONS
Law Section: Tax Law
Law: Amd S31, Tax L
Law Section: Tax Law
Law: Amd S31, Tax L
- Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
- May 5, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
BILL NUMBER:S5314 TITLE OF BILL: An act to amend the tax law, in relation to the empire state film production credit PURPOSE: This legislation represents a technical correction to the 2010 Film and Television Post Production Tax Credit and further removes barriers to eligibility into the program. The Post Production Film and Television Tax Credit has resulted in a rethinking by production companies regarding where to locate a production's post work. This understanding is based on numerous conversations between New York based Post Production facilities and the film and television production decision makers. What has been learned is that while there exists great interest in posting in New York, given its wealth of talent, landmarks and other resources, the 10% credit is not a high enough rebate for the industry to shift a significant amount of work to New York. New York's post production tax credit program is simply not maximizing its potential to entice post production projects. SUMMARY OF PROVISIONS: This legislation further recognizes that Film and Television post production work is comprised of three distinct subsets; "Music", "Visual Effects" and "Editorial". In regards to music, there is only one fully functioning scoring stage in New York State. Due to this limited local resource, our State does not possess the infrastructure to complete every score of every movie that might otherwise come to New York for post production services. Similarly, while the visual effects industry is growing in New York, it does not currently have the labor force necessary to meet the VFX shot demands of every film that desires to post in NY. These market realities are addressed in this amendment by removing the requirement to meet a 75% threshold for all of post production's aspects, thereby removing a barrier to eligibility for those productions that seek to bring post production work to New York (as the threshold on the post spend in its entirety is nearly impossible to reach given the likelihood that all or portions of the music and/or VFX work will need to be created outside of the state). To structure the program to require 75% of anyone of the subsets within the definition of "post production" be met will enable the infrastructures of each industry sector to grow, provide incentive for the producers to remain in New York for post production and therefore result in maximizing job creation. FISCAL IMPLICATIONS: To be determined. EFFECTIVE DATE: Immediately.
S T A T E O F N E W Y O R K ________________________________________________________________________ 5314 2011-2012 Regular Sessions I N SENATE May 5, 2011 ___________ Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to the empire state film production credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS:
Section 1. Section 31 of the tax law, as added by section 12 of part Q of chapter 57 of the laws of 2010, is amended to read as follows:
S 31. Empire state film post production credit. (a) Allowance of cred- it. (1) A taxpayer which is a qualified film production company, and which is subject to tax under article nine-A or twenty-two of this chap- ter, unless eligible for the credit under section twenty-four of this article with respect to the qualified film, shall be allowed a credit against such tax, pursuant to the provisions referenced in subdivision (c) of this section to be computed as provided in this subdivision. (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) of [
ten] THIR- TY percent and the qualified post production costs paid in the production of a qualified film at a qualified post production facility. (3) A taxpayer shall not be eligible for the credit established by this section unless the qualified post production costs at a qualified post production facility meet or exceed seventy-five percent of the [ total post production costs] QUALIFIED EXPENDITURES WITH RESPECT TO ANY ONE OR MORE OF THE FOLLOWING SUBSETS:
(I) PICTURE AND SOUND POST PRODUCTION COSTS, AS HEREINAFTER DEFINED; (II) MUSIC, AS HEREINAFTER DEFINED; AND (III) VISUAL EFFECTS, AS HEREIN- AFTER DEFINED; AS EACH MAY BE paid or incurred in the post production of the qualified film at any post production facility. The credit shall [
be allowed] ONLY BE ALLOWED AS TO THE SUBSET OR SUBSETS FOR WHICH THE EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11426-01-1 S. 5314 2 SEVENTY-FIVE PERCENT THRESHOLD HAS BEEN MET for the taxable year in which the production of such qualified film is completed. (4) No qualified post production costs used by a taxpayer either as the basis for the allowance of the credit provided for under this section or used in the calculation of the credit provided for under this section shall be used by such taxpayer to claim any other credit allowed pursuant to this chapter. (b) Definitions. As used in this section the following terms shall have the following meanings:
(1) "Qualified film production company" and "qualified film" shall have the same meaning as are ascribed to such terms by section twenty- four of this article. (2) "Post production costs" means ANY EXPENDITURE IN PICTURE AND SOUND POST PRODUCTION, MUSIC, OR VISUAL EFFECTS, AS HEREIN DEFINED, IN CONNECTION WITH THE production of original content for a qualified film employing traditional, emerging and new workflow techniques used in post-production [
for picture, sound and music editorial, rerecording and mixing, visual effects, graphic design, original scoring, animation, and musical composition; but]. FOR PURPOSES OF THIS PARAGRAPH, "PICTURE AND SOUND POST PRODUCTION" SHALL INCLUDE COSTS INCURRED IN PICTURE AND SOUND EDITORIAL, ASSEMBLY, RECORDING, RERECORDING, MIXING, TRANSFERS, RELATED EQUIPMENT AND FACILITY FEES, SCREENING, COLOR GRADING, COLOR CORRECTION, SCANNING, FILM CLEANING, CONFORMING, AND LABORATORY SERVICES; "MUSIC" SHALL INCLUDE COSTS INCURRED IN ORIGINAL SCORING, MUSIC EDITORIAL, AND RELATED EQUIPMENT AND FACILITY FEES; "VISUAL EFFECTS" SHALL INCLUDE COSTS INCURRED IN GRAPHIC DESIGN, COMPOSITING, TRACKING, REMOVALS, ANIMATION, DATA ARCHIVING, RENTALS; HOWEVER, THE FOREGOING shall not include the editing of previously produced content for a qualified film. (3) "Post production facility" means a building and/or complex of buildings and their improvements on which film are intended to be post produced. (4) "Qualified post production facility" means a post production facility located in the state, engaged in finishing a qualified film. (c) Notwithstanding any other provision of law to the contrary, the aggregate amount of tax credits available under this section shall not exceed the amounts allowed pursuant to subdivision (e) of section seven of part P of chapter sixty of the laws of two thousand four and shall be allocated in the same manner as provided for in subdivision (a) of section seven of part P of chapter sixty of the laws of two thousand four. (d) Cross-references. For application of the credit provided for in this section, see the following provisions of this chapter:
(1) article 9-A: section 210: subdivision 41. (2) article 22: section 606: subsection (qq). S 2. This act shall take effect immediately.