Authorizes additional tax credits for certain costs incurred in film and television productions in a city having a population of one million or more.
TITLE OF BILL: An act to amend the tax law and part P of chapter 60 of the laws of 2004, amending the tax law relating to the empire state film production credit, in relation to authorizing additional tax credits for certain costs incurred in film and television productions in a city having a population of one million or more
PURPOSE: This legislation would ensure the continued growth of the film production industry in New York City through 2014.
SUMMARY OF PROVISIONS: Section 1 amends adds a new definition of "qualified independent film production company" to tax law 51201-a(b). This section authorizes New York City to amend its General Corporation Tax ("GCT") and its Unincorporated Business Tax ("UBT").
Section 2 amends section 7(b)of part P of Chapter 60 of the Laws of 2004, to increase the aggregate amount of the tax credits allowed by the City of New York by an additional $24 million a year in 2011, 2012 and 2013. These new credits may not be claimed before taxable years beginning January 1, 2011, and payout in any year is capped at $24 million, with any amount in excess to be claimed in the subsequent year. There is an exception for qualified independent film production companies, which may claim credits up to $250,000 per qualified film in the taxable year in which film production is completed.
JUSTIFICATION: In the 2009-2010 State budget, the Empire State Film Production Credit program was provided an additional $350 million in State funding. That legislation did not apply to the New York City program, which has been enacted through the City's GCT and the UBT. This bill will secure funding for the New York City film production credit through 2013. Given the fiscal constraints facing the City, this legislation contains measures to enhance the effectiveness of the incentive and to better target the tax credit, and also defers the cost to the City of providing the additional credits to tax years beginning on or after January 1, 2012.
The City and State have taken 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 dramatically enhanced the range of services that it offers to the industry. Combined with the State credit, the New York City "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 or 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.
LEGISLATIVE HISTORY: S.5842 of 2009-10, Referred to Investigations & Government Operations
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, 2012.
STATE OF NEW YORK ________________________________________________________________________ 880--A 2011-2012 Regular Sessions IN SENATE (PREFILED) January 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 -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law and part P of chapter 60 of the laws of 2004, amending the tax law relating to the empire state film production credit, in relation to authorizing additional tax credits for certain costs incurred in film and television productions in 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) the percentage of qualified production costs used to calculate such credit shall be five percent, (B) whenever such section twenty-four references the state, such words shall be read as referencing the city, (C) such credit shall be allowed only to a taxpayer which is a qualified film production company OR QUALIFIED INDE- PENDENT FILM PRODUCTION COMPANY, and (D) the effective date of such credit shall be July first, two thousand six. Such credit shall beEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03856-02-2 S. 880--A 2
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 corpo- ration tax and the unincorporated business tax. A "QUALIFIED INDEPEND- ENT FILM PRODUCTION COMPANY" IS AN INDIVIDUAL OR A CORPORATION, PARTNER- SHIP, LIMITED PARTNERSHIP OR OTHER ENTITY THAT IS NOT PUBLICLY TRADED, AND PUBLICLY TRADED COMPANIES THAT DO NOT OWN, DIRECTLY OR INDIRECTLY, MORE THAN FIVE PERCENT OF THE QUALIFIED INDEPENDENT FILM PRODUCTION COMPANY, AND THE INDIVIDUAL OR ENTITY IS PRINCIPALLY ENGAGED IN THE PRODUCTION OF A QUALIFIED FILM AND CONTROLS THE QUALIFIED FILM DURING PRODUCTION. S 2. Subdivision (b) of section 7 of part P of chapter 60 of the laws of 2004, amending the tax law relating to the empire state film production credit, as amended by section 2 of part Y of chapter 62 of the laws of 2006, is amended to read as follows: (b) (1) The aggregate amount of tax credits allowed pursuant to the authority of subdivision (b) of section 1201-a of the tax law in any calendar year shall be $12.5 million in 2004 and 2005 and $30 million in 2006 through
2012. Such aggregate amount of credits shall be allocated by the mayor's office of film, theater and broadcasting among taxpayers in order of priority based upon the date of filing an applica- tion for allocation of film 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 year. (2) NOTWITHSTANDING PARAGRAPH (1) OF THIS SUBDIVISION, THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED PURSUANT TO THE AUTHORITY OF SUBDIVISION (B) OF SECTION 1201-A OF THE TAX LAW SHALL BE INCREASED BY AN ADDITIONAL $24 MILLION IN 2012. THIS ADDITIONAL AMOUNT SHALL BE ALLOCATED BY THE MAYOR'S OFFICE OF FILM, THEATER AND BROADCASTING IN ACCORDANCE WITH PARAGRAPH (1) OF THIS SUBDIVISION. A TAXPAYER ALLOCATED CREDITS FROM THE AMOUNTS AUTHORIZED UNDER THIS PARAGRAPH SHALL NOT CLAIM SUCH CREDITS BEFORE TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1, 2012. NOTWITH- STANDING THE YEAR TO WHICH CREDITS AUTHORIZED UNDER THIS PARAGRAPH ARE ALLOCATED BY THE MAYOR'S OFFICE OF FILM, THEATER AND BROADCASTING, SUCH CREDITS SHALL NOT BE CLAIMED IN EXCESS OF $24 MILLION IN A GIVEN YEAR. CREDITS AUTHORIZED UNDER THIS PARAGRAPH AND ALLOCATED IN EXCESS OF $24 MILLION IN A GIVEN YEAR SHALL BE CLAIMED IN THE SUBSEQUENT YEAR. NOTWITHSTANDING THE FOREGOING, A TAXPAYER WHICH IS A QUALIFIED INDEPEND- ENT FILM PRODUCTION COMPANY WHO IS ALLOCATED CREDITS UP TO $250,000 PER QUALIFIED FILM FROM THE AMOUNTS AUTHORIZED UNDER THIS PARAGRAPH SHALL CLAIM SUCH CREDITS FOR THE TAXABLE YEAR IN WHICH THE PRODUCTION OF SUCH QUALIFIED FILM IS COMPLETED. S 3. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2012.