Includes writer's salaries and fees within production costs eligible for the empire state film production credit.
TITLE OF BILL: An act to amend the tax law, in relation to eligibility for the empire state film production credit
PURPOSE: Includes writer salaries and fees within production costs eligible for the empire state film production credit.
SUMMARY OF PROVISIONS: Section 1. Provides for the allowance of credit.
Section 2. Modifies the definition of "qualified production costs" to include writer's fees and services. Defines "writer" for purposes of the Empire State Film Production Credit.
Section 3. Outlines criteria to qualify as eligible production costs including requirements for writer residency, and either a cap of $50,000 per writer on the amount of the credit that may be claimed by a qualified taxpayer, or a requirement of hiring a minority or woman writer when more than three writers are hired.
Section 4. This bill shall take effect on January 1, 2012.
JUSTIFICATION: Many films and television shows are drawn to the unique urban and picturesque landscapes of New York. The Empire State Film Production Credit has created jobs and brought revenue to New York when productions move to or begin in New York and take advantage of the 30% tax credit on qualifying production costs. However, it has not created employment opportunities for the thousands of New York State residents who try to earn their living by writing for television and film.
In 2008 there were 15 major television productions filming in New York State. Collectively, these shows employed a total of 122 writers. Of these 122 writers only 24 of them live in New York. The remaining writers reside on the West Coast, many in Los Angeles. Some of these writers work on scripts for shows such as Ugly Betty and Law & Order: special victims Unit, where the City of New York is a main character, without even visiting New York prior to writing an episode. At the same time, many New Yorkers have found it impossible to maintain a career writing for television without leaving the state, uprooting their families and depriving the state of tax revenue.
Currently the Empire State Film Credit does not include writers as a qualified production cost, while Connecticut and Michigan do include writers in their film production tax credits. Canada, the biggest competitor for film and television productions, includes writers in their tax credit as well. Including writers as a qualified production cost will create jobs for New Yorkers as well as preserving New York's strong tradition as a creative center for entertainment.
The inclusion of writers as a qualified production cost would create new jobs and revenue with little fiscal impact. Funds for the Empire State Film Production Tax Credit are already allocated; this bill would carve out a small amount of those funds and devote them to writers.
LEGISLATIVE HISTORY: 2009-2010: S.6101 Schneiderman/A.8144 Englebright
FISCAL IMPLICATIONS: This bill makes use of funds already allocated to the Empire Film Tax Credit. No additional allocation of funds is required.
EFFECTIVE DATE: This act shall take effect January 1, 2012.
STATE OF NEW YORK ________________________________________________________________________ 4199 2011-2012 Regular Sessions IN SENATE March 23, 2011 ___________Introduced by Sen. HANNON -- 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 eligibility for 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. Paragraph 1 of subdivision (a) of section 24 of the tax law, as amended by section 3 of part Q of chapter 57 of the laws of 2010, is amended to read as follows: (1) Allowance of credit. A taxpayer which is a qualified film production company, or a qualified independent film production company, or which is a sole proprietor of or a member of a partnership which is a qualified film production company or a qualified independent film production company, and which is subject to tax under articles nine-A or twenty-two of this chapter, shall be allowed a credit against such tax, pursuant to the provisions referenced in subdivision
[(c)](E) of this section, to be computed as [hereinafter]provided IN THIS SECTION. S 2. Paragraph 2 of subdivision (b) of section 24 of the tax law, as added by section 1 of part P of chapter 60 of the laws of 2004, is amended and a new paragraph 8 is added to read as follows: (2) "Production costs" means any costs for tangible property used and services performed directly and predominantly in the production (includ- ing pre-production and post production) of a qualified film. "Production costs" shall not include [(i) costs for a story, script or scenario to be used for a qualified film and (ii)]wages or salaries or other compensation for writers, directors, including music directors, producers and performers (other than background actors with no scripted lines). WRITERS' FEES AND SALARIES SHALL BE ELIGIBLE PRODUCTION COSTS SUBJECT TO THE PROVISIONS OF SUBDIVISION (C) OF THIS SECTION; PROVIDED, HOWEVER, THAT FEES THAT ARE BASED ON DEFERRED, LEVERAGED OR PROFITEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10413-02-1 S. 4199 2
PARTICIPATION COSTS, OR ARE IN EXCESS OF THOSE OTHERWISE PERMITTED BY SUBDIVISION (C) OF THIS SECTION SHALL NOT BE ELIGIBLE PRODUCTION COSTS. "Production costs" generally include technical and crew production costs, such as expenditures for film production facilities, or any part thereof, props, makeup, wardrobe, film processing, camera, sound record- ing, set construction, lighting, shooting, editing and meals. (8) "WRITER" MEANS A WRITER EMPLOYED OR RETAINED TO WRITE OR REVISE SCRIPTS, SCREEN PLAYS, TELEPLAYS, DIALOGUE, SKETCHES, ROUTINES OR NARRATIONS. S 3. Subdivisions (c) and (d) of section 24 of the tax law are relet- tered subdivisions (e) and (f) and two new subdivisions (c) and (d) are added to read as follows: (C) FOR A FEATURE FILM OR TELEVISION PRODUCTION, WRITERS' FEES AND SALARIES SHALL BE ELIGIBLE PRODUCTION COSTS ONLY IF THE WRITER IS A RESIDENT OF THIS STATE AND EITHER: (1) THE TAXPAYER CLAIMS SUCH COSTS IN AN AMOUNT NOT TO EXCEED FIFTY THOUSAND DOLLARS FOR THE FEES AND SALARIES OF EACH SUCH WRITER; OR (2) WHERE THE TAXPAYER HIRES OR RETAINS THREE OR MORE SUCH WRITERS FOR SERVICE ON AN ELIGIBLE PRODUCTION, AT LEAST ONE SUCH WRITER IS A MINORI- TY GROUP MEMBER AS DEFINED IN SUBDIVISION EIGHT OF SECTION THREE HUNDRED TEN OF THE EXECUTIVE LAW, AND THE TAXPAYER CLAIMS SUCH COSTS IN AN AMOUNT NOT TO EXCEED FIFTY THOUSAND DOLLARS FOR THE FEES AND SALARY OF EACH SUCH WRITER. (D) FOR EACH TAX YEAR, THE AMOUNT OF THE CREDIT BASED UPON THE INCLU- SION OF WRITERS' FEES AND SALARIES AS PRODUCTION COSTS SHALL NOT, IN THE AGGREGATE, EXCEED FIVE MILLION DOLLARS. FURTHERMORE, THE CREDIT AUTHOR- IZED BY THIS SECTION THAT IS ATTRIBUTABLE TO WRITERS' FEES AND SALARIES SHALL BE APPORTIONED AMONG ALL ELIGIBLE TAXPAYERS. S 4. This act shall take effect January 1, 2012.