S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2851
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 17, 2017
                                ___________
 
 Introduced  by  Sen.  PARKER -- 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 creation of  the  empire
   state music production credit
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The tax law is amended by adding a new section 43  to  read
 as follows:
   § 43.  EMPIRE STATE MUSIC PRODUCTION CREDIT. (A)(1) ALLOWANCE OF CRED-
 IT. A TAXPAYER WHICH IS A QUALIFIED MUSIC PRODUCTION COMPANY, OR A QUAL-
 IFIED  INDEPENDENT MUSIC PRODUCTION COMPANY, OR WHICH IS A SOLE PROPRIE-
 TOR OF OR  A  MEMBER  OF  A  PARTNERSHIP  WHICH  IS  A  QUALIFIED  MUSIC
 PRODUCTION  COMPANY OR A QUALIFIED INDEPENDENT MUSIC PRODUCTION COMPANY,
 AND WHICH IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO  OF  THIS
 CHAPTER, SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX.
   (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 TWENTY-FIVE
 PERCENT AND THE QUALIFIED PRODUCTION COSTS PAID  IN  THE  PRODUCTION  OF
 MUSIC  BY  THE TAXPAYER.   QUALIFYING MUSIC PRODUCTIONS SHALL BE COMMER-
 CIALLY LICENSED SOUND RECORDING PROJECTS HAVING AS THEIR PRINCIPAL PLACE
 OF PRODUCTION AND RECORDING THIS STATE  AND  REQUIRING  EXPENDITURES  IN
 EXCESS  OF  TWENTY-FIVE  THOUSAND  DOLLARS.  IF  THE ANNUAL COST OF SUCH
 PRODUCTIONS TO A TAXPAYER EXCEEDS ONE HUNDRED THOUSAND DOLLARS,  BUT  NO
 SINGLE  SUCH  PRODUCTION  EXCEEDS  ONE  HUNDRED  THOUSAND  DOLLARS, SUCH
 TAXPAYER MAY APPLY FOR THE CREDIT ALLOWED BY THIS SECTION ON  AN  AGGRE-
 GATE BASIS PROVIDED SUCH TAXPAYER EMPLOYES TEN OR MORE RESIDENTS OF THIS
 STATE. QUALIFIED PRODUCTION COSTS SHALL MEAN COSTS FOR TANGIBLE PROPERTY
 USED AND SERVICES PERFORMED DIRECTLY AND PREDOMINANTLY IN THE PRODUCTION
 OF   QUALIFIED  MUSIC  PRODUCTION  IN  THIS  STATE.    QUALIFYING  MUSIC
 PRODUCTION COSTS SHALL INCLUDE STUDIO RENTAL  FEES  AND  RELATED  COSTS;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03415-01-7

 S. 2851                             2
 
 INSTRUMENT  AND EQUIPMENT RENTAL FEES; PRODUCTION SESSION FEES FOR MUSI-
 CIANS, SONGWRITERS, COMPOSERS, ARRANGERS, MUSIC PRODUCERS,  PROGRAMMERS,
 ENGINEERS  AND  TECHNICIANS; MIXING AND MASTERING SERVICES OF QUALIFYING
 MUSIC  PRODUCTIONS; AND HOTEL CATERING AND LOCAL TRANSPORTATION EXPENDI-
 TURES DIRECTLY RELATED TO MUSIC  PRODUCTION.  COSTS  SHALL  NOT  INCLUDE
 RECORDING  LIVE  CONCERTS;  ARTISTS  AND PRODUCER ROYALTIES OR ADVANCES;
 LICENSING FEES FOR SAMPLES;  INTERPOLATIONS  OR  OTHER  MUSIC  CLEARANCE
 COSTS;  MASTERING OR POST-PRODUCTION EXPENDITURES FOR PROJECTS THAT WERE
 NOT PRINCIPALLY TRACKED AND RECORDED IN THIS STATE; NOR ANY COSTS  ASSO-
 CIATED   WITH   MANUFACTURING,   DUPLICATION,  PACKAGING,  DISTRIBUTION,
 PROMOTION, MARKETING AND TOURING NOT SPECIFICALLY OUTLINED ABOVE.
   (3) NO QUALIFIED PRODUCTION COSTS USED BY A TAXPAYER AS THE BASIS  FOR
 THE  ALLOWANCE  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) ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS  ALLOWED
 UNDER  THIS SECTION, SUBDIVISION FORTY-NINE OF SECTION TWO HUNDRED TEN-B
 AND SUBSECTION (CCC) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER  IN  ANY
 CALENDAR  YEAR  SHALL BE TWENTY-FIVE MILLION DOLLARS AND ONE MILLION TWO
 HUNDRED FIFTY THOUSAND DOLLARS IN ANY GIVEN WEEK. SUCH AGGREGATE  AMOUNT
 OF  CREDITS  SHALL  BE  ALLOCATED BY THE EMPIRE STATE DEVELOPMENT CORPO-
 RATION AMONG TAXPAYERS IN ORDER OF  PRIORITY  BASED  UPON  THE  DATE  OF
 FILING  AN  APPLICATION  FOR  ALLOCATION OF MUSIC PRODUCTION CREDIT WITH
 SUCH OFFICE.  NO SINGLE TAXPAYER MAY CLAIM OR BE AWARDED MORE  THAN  TEN
 PERCENT  OF  THE  AGGREGATE  AMOUNT  OF  TAX  CREDITS ALLOWED UNDER THIS
 SECTION.  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.
   (C)  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-B: SUBDIVISION 49
   (2) ARTICLE 22: SECTION 606: SUBSECTION (CCC)
   § 2. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 49 to read as follows:
   49.  EMPIRE  STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A
 TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-THREE OF THIS CHAPTER
 SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS  PROVIDED  IN  SUCH  SECTION
 FORTY-THREE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
 FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
 THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
 SECTION TWO HUNDRED TEN OF THIS ARTICLE.  PROVIDED, HOWEVER, THAT IF THE
 AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE
 YEAR  REDUCES  THE TAX TO SUCH AMOUNT, THE EXCESS SHALL BE TREATED AS AN
 OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORDANCE  WITH  THE
 PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
 HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
 Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
 EON.
   §  3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
 of the tax law is amended by adding a new  clause  (xliii)  to  read  as
 follows:
 (XLIII) EMPIRE STATE MUSIC           AMOUNT OF CREDIT FOR
 PRODUCTION CREDIT UNDER              QUALIFIED PRODUCTION CREDIT
 SUBSECTION (CCC)                     MUSIC UNDER SUBDIVISION

 S. 2851                             3
 
                                      FORTY-NINE OF SECTION TWO
                                      HUNDRED TEN-B
   §  4. Section 606 of the tax law is amended by adding a new subsection
 (ccc) to read as follows:
   (CCC) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A
 TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-THREE OF THIS CHAPTER
 SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS  PROVIDED  IN  SUCH  SECTION
 FORTY-THREE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
 YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT-
 ED  OR  REFUNDED  AS  PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS
 ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
   § 5. The empire state development corporation shall  conduct  a  study
 analyzing  the  economic impact of the tax credit authorized pursuant to
 section one of this act and shall report its findings,  conclusions  and
 recommendations  to  the  governor  and the legislature on or before one
 year from the date this act shall become a law, and  shall  submit  with
 its report such legislative proposals as it deems necessary to implement
 its  recommendations.    The  empire state development corporation shall
 list the recipients of the tax credit authorized pursuant to section one
 of this act on their official internet website.
   § 6. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.