Relates to the allocation of the empire state film production credit against taxes for certain film production costs issued by a city having a population of one million or more.
TITLE OF BILL: An act to amend the tax law, in relation to the allocation of such credit against taxes for certain film production costs issued by a city having a population of one million or more
PURPOSE: This legislation would ensure the "Made in NY" film production tax credit would be sustained through 2013.
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 would amend Section 7(b) of part P of Chapter 60 of the Laws of 2004 to provide that if any of the aggregate amount of tax credits that are available in a given year remain unallocated in such year, they would be available for allocation in a subsequent year.
Section 3 of the bill would amend Section 7 of part P of chapter 60 of the laws of 2004 by adding two new subdivisions (f) and (g). Subdivision (f) would provide that the tax credits allocated in 2011 under the GCT and UST would not exceed $24 million, and if the amount of credits applied for reaches $24 million, additional tax credit applications would not be accepted until on or after January 1, 2012. Subdivision (g) would provide for an additional aggregate annual amount of $24 million to be allowed in 2012 and 2013, in $12 million increments for the periods January 1st through June 30th, and from July 1st through December 31st, for each of these years. Moreover, should the total amount of allocated credits applied for in any of such six-month periods reach the allowed additional aggregate amount of $12 million, additional tax credit applications would not be accepted until the first day of the next six-month period which has tax credits available for allocation.
Section 4 of the bill provides that the law would take effect immediately and would apply to taxable years beginning on or after January 1, 2011, and to applications filed on or after such date.
JUSTIFICATION: This bill will secure funding for the "Made in NY" film production credit through the end of 2013. Given the fiscal constraints facing the City, this legislation would also contain measures to enhance
the program's effectiveness as an incentive and to better target the tax credit. These proposals represent a carefully crafted plan to share the sacrifices needed to cope with the fiscal challenges facing the City 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 annual cap of $24 million and 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.
Both the City and State have taken a number of important steps to provide incentives to the film and television industry, because it is an important contributor to the City's economy. 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. Combined with the State credit, the "Made in NY" film production tax credit, enacted in January 2005, has been a major success in attracting film and television production to New York City. Production spending for qualifying film and television projects increased significantly since 2004, accounting for an additional $5 billion in direct spending while providing 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, 2013; provided further that this act shall apply to applications filed on or after January 1, 2013.
STATE OF NEW YORK ________________________________________________________________________ 2027 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. SQUADRON -- 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 allocation of such cred- it against taxes for certain film production costs issued by a city having a population of one million or more THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision (b) of section 1201-a of the tax law, as amended by section 5 of part Y of chapter 62 of the laws of 2006, is amended to read as follows: (b) Empire state film production credit. Any city in this state having a population of one million or more, acting through its local legisla- tive body, is hereby authorized to adopt and amend local laws to allow a credit against the general corporation tax and the unincorporated busi- ness tax imposed pursuant to the authority of chapter seven hundred seventy-two of the laws of nineteen hundred sixty-six which shall be substantially identical to the credit allowed under section twenty-four of this chapter, except that: (A) (I) the percentage of qualified production costs used to calculate such credit shall be
[five]FOUR percent, (II) FOR A TELEVISION SERIES WITH RESPECT TO WHICH A CREDIT HAS BEEN ALLOWED (1) IN THREE TAXABLE YEARS, THE AMOUNT OF THE CREDIT SHALL BE THREE PERCENT, (2) IN FOUR TAXABLE YEARS, THE AMOUNT OF THE CREDIT SHALL BE TWO PERCENT, AND (III) NO CREDIT SHALL BE ALLOWED WITH RESPECT TO A TELEVISION SERIES FOR WHICH A CREDIT HAS BEEN ALLOWED IN FIVE TAXABLE YEARS; (B) SUCH CREDIT SHALL NOT EXCEED TWO HUNDRED FIFTY THOUSAND DOLLARS PER QUALIFIED FILM OR EPISODE OF A QUALIFIED TELEVISION SERIES WITH RESPECT TO QUALIFIED PRODUCTION COSTS; PROVIDED, HOWEVER, THAT IF THEEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05563-01-3 S. 2027 2
QUALIFIED POST PRODUCTION COSTS PAID OR INCURRED WHICH ARE ATTRIBUTABLE TO THE USE OF TANGIBLE PROPERTY OR THE PERFORMANCE OF SERVICES AT A FILM POST PRODUCTION FACILITY WITHIN THE CITY OF NEW YORK IN THE PRODUCTION OF SUCH QUALIFIED FILM EQUAL OR EXCEED SEVENTY-FIVE PERCENT OF ALL THE POST PRODUCTION COSTS PAID OR INCURRED WHICH ARE ATTRIBUTABLE TO THE USE OF TANGIBLE PROPERTY OR THE PERFORMANCE OF SERVICES AT ANY FILM POST PRODUCTION FACILITY WITHIN AND WITHOUT THE CITY IN THE PRODUCTION OF SUCH QUALIFIED FILM, THEN THE AGGREGATE ANNUAL MAXIMUM ALLOWED CREDIT SHALL BE THREE HUNDRED THOUSAND DOLLARS,
[(B)](C) whenever such section twenty-four references the state, such words shall be read as referencing the city, [(C)](D) such credit shall be allowed only to a taxpayer which is a qualified film production company, [and (D)](E) the effective date of such credit shall be July first, two thousand six. Such credit shall be applied in a manner consistent with the credit allowed under subdivision thirty-six of section two hundred ten of this chapter except as may be necessary to take into account differences between the general corporation tax and the unincorporated business tax, AND (F) FOR PURPOSES OF THIS SUBDIVISION, "TELEVISION SERIES" OR "EPISODIC TELEVISION SERIES" MEANS A RECURRING PRODUCTION INTENDED IN ITS INITIAL RUN FOR BROADCAST ON TELEVISION, WHETHER FREE OR THROUGH SUBSCRIPTION-BASED SERVICE, THAT HAS A RUNNING TIME OF AT LEAST THIRTY MINUTES IN LENGTH, INCLUSIVE OF COMMERCIAL ADVERTISEMENT AND INTERSTI- TIAL PROGRAMMING. S 2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2013; provided further that this act shall apply to applications filed on or after January 1, 2013.