N.Y. Tax Law § 28

* § 28. Empire state commercial production credit. (a) Allowance of\ncredit. (1) A taxpayer which is a qualified commercial production\ncompany, or which is a sole proprietor of a qualified commercial\nproduction company, and which is subject to tax under article nine-A or\ntwenty-two of this chapter, shall be allowed a credit against such tax,\npursuant to the provisions referenced in subdivision (c) of this\nsection, to be computed as provided in this section. Provided, however,\nto be eligible for such credit, at least seventy-five percent of the\nproduction costs (excluding post production costs) paid or incurred\ndirectly and predominantly in the actual filming or recording of the\nqualified commercial must be costs incurred in New York state. The tax\ncredit allowed pursuant to this section shall apply to taxable years\nbeginning before January first, two thousand seventeen.\n (2) The state has annually seven million dollars in total tax credits\nto disburse to all eligible commercial production companies. The seven\nmillion dollars in total tax credits shall be allocated according to\nsubparagraphs (i), (ii) and (iii) of this paragraph:\n (i) The state annually will disburse one million of the total seven\nmillion in tax credits to all eligible production companies and the\namount of the credit shall be the product (or pro rata share of the\nproduct, in the case of a member of a partnership) of twenty percent of\nthe qualified production costs paid or incurred in the production of a\nqualified commercial, provided that the qualified production costs paid\nor incurred are attributable to the use of tangible property or the\nperformance of services within the state in the production of such\nqualified commercial. To be eligible for said credit the total qualified\nproduction costs of a qualified production company must be greater in\nthe aggregate during the current calendar year than the average of the\nthree previous years for which the credit was applied. Provided,\nhowever, that until a qualified production company has established a\nthree year history, the credit will be based on either the previous year\nor the average of the two previous years, whichever period is longer for\nthe qualified production company seeking the credit. If the qualified\nproduction company has never applied for the growth credit, the previous\nyear's data will be used to create a benchmark. The tax credit shall be\napplied only to the amount of the total qualified production costs of\nthe current calendar year that are greater than the total amount of\nproduction costs of the appropriate measurement period as described in\nthis subparagraph. The tax credit must be distributed to eligible\nproduction companies on a pro rata basis, provided, however, that no\nsuch qualified production company shall receive more than three hundred\nthousand dollars annually for such credit. The credit shall be allowed\nfor the taxable year in which the production of such qualified\ncommercial is completed.\n (ii) The state annually will disburse three million of the total seven\nmillion in tax credits to all eligible production companies who film or\nrecord qualified commercials within the metropolitan commuter\ntransportation district as defined in section twelve hundred sixty-two\nof the public authorities law. The amount of the credit shall be the\nproduct (or pro rata share of the product, in the case of a member of a\npartnership) of five percent of the qualified production costs paid or\nincurred in the production of a qualified commercial, provided that the\nqualified production costs paid or incurred are attributable to the use\nof tangible property or the performance of services within the state in\nthe production of such qualified commercial. To be eligible for said\ncredit the total qualified production costs of a qualified production\ncompany must be greater than five hundred thousand dollars in the\naggregate during the calendar year. Such credit will be applied to\nqualified production costs exceeding five hundred thousand dollars in a\ncalendar year.\n (iii) The state annually will disburse three million of the total\nseven million in tax credits to all eligible production companies who\nfilm or record a qualified commercial outside of the metropolitan\ncommuter transportation district as defined in section twelve hundred\nsixty-two of the public authorities law; provided, however, that if,\nafter July thirty-first the state reviews all applications from eligible\nproduction companies who film or record a qualified commercial outside\nof the metropolitan commuter district for a given year, tax credits\nremain unallocated under this subparagraph, those credits shall be\nallotted to the credits set forth in subparagraph (i) of this paragraph\nfor use consistent with the purposes of such subparagraph. The amount of\nthe credit shall be the product (or pro rata share of the product, in\nthe case of a member of a partnership) of five percent of the qualified\nproduction costs paid or incurred in the production of a qualified\ncommercial, provided that the qualified production costs paid or\nincurred are attributable to the use of tangible property or the\nperformance of services within the state in the production of such\nqualified commercial. To be eligible for said credit the total qualified\nproduction costs of a qualified production company must be greater than\none hundred thousand dollars in the aggregate during the calendar year.\nSuch credit will be applied to qualified production costs exceeding one\nhundred thousand dollars in a calendar year.\n ** (3) No qualified production costs used by a taxpayer either as the\nbasis for the allowance of the credit provided for under this section or\nused in the calculation of the credit provided for under this section\nshall be used by such taxpayer to claim any other credit allowed\npursuant to this chapter.\n Notwithstanding any provisions of this section to the contrary, a\ncorporation or partnership, which otherwise qualifies as a qualified\ncommercial production company, and is similar in operation and in\nownership to a business entity or entities taxable, or previously\ntaxable, under section one hundred eighty-three, one hundred eighty-four\nor one hundred eighty-five of article nine; article nine-A, article\nthirty-two or thirty-three of this chapter or which would have been\nsubject to tax under article twenty-three of this chapter (as such\narticle was in effect on January first, nineteen hundred eighty) or the\nincome or losses of which is or was includable under article twenty-two\nof this chapter shall not be deemed a new or separate business, and\ntherefore shall not be eligible for empire state commercial production\nbenefits, if it was not formed for a valid business purpose, as such\nterm is defined in clause (D) of subparagraph one of paragraph (o) of\nsubdivision nine of section two hundred eight of this chapter and was\nformed solely to gain empire state commercial production credit\nbenefits.\n ** NB Effective until January 1, 2015\n ** (3) No qualified production costs used by a taxpayer either as the\nbasis for the allowance of the credit provided for under this section or\nused in the calculation of the credit provided for under this section\nshall be used by such taxpayer to claim any other credit allowed\npursuant to this chapter.\n Notwithstanding any provisions of this section to the contrary, a\ncorporation or partnership, which otherwise qualifies as a qualified\ncommercial production company, and is similar in operation and in\nownership to a business entity or entities taxable, or previously\ntaxable, under section one hundred eighty-three, one hundred eighty-four\nor one hundred eighty-five of article nine; article nine-A or\nthirty-three of this chapter or which would have been subject to tax\nunder article twenty-three of this chapter (as such article was in\neffect on January first, nineteen hundred eighty) or which would have\nbeen subject to tax under article thirty-two of this chapter (as such\narticle was in effect on December thirty-first, two thousand fourteen)\nor the income or losses of which is or was includable under article\ntwenty-two of this chapter shall not be deemed a new or separate\nbusiness, and therefore shall not be eligible for empire state\ncommercial production benefits, if it was not formed for a valid\nbusiness purpose, as such term is defined in clause (D) of subparagraph\none of paragraph (o) of subdivision nine of section two hundred eight of\nthis chapter and was formed solely to gain empire state commercial\nproduction credit benefits.\n ** NB Effective January 1, 2015 until January 1, 2018\n ** (4) Notwithstanding any provisions of this section to the contrary,\na corporation or partnership, which otherwise qualifies as a qualified\ncommercial production company, and is similar in operation and in\nownership to a business entity or entities taxable, or previously\ntaxable, under section one hundred eighty-three or one hundred\neighty-four or former section one hundred eighty-five of article nine;\narticle nine-A or thirty-three of this chapter or which would have been\nsubject to tax under article twenty-three of this chapter (as such\narticle was in effect on January first, nineteen hundred eighty) or\nwhich would have been subject to tax under article thirty-two of this\nchapter (as such article was in effect on December thirty-first, two\nthousand fourteen) or the income or losses of which is or was includable\nunder article twenty-two of this chapter shall not be deemed a new or\nseparate business, and therefore shall not be eligible for empire state\ncommercial production benefits, if it was not formed for a valid\nbusiness purpose, as such term is defined in clause (D) of subparagraph\none of paragraph (o) of subdivision nine of section two hundred eight of\nthis chapter and was formed solely to gain empire state commercial\nproduction credit benefits.\n ** NB Effective January 1, 2018\n (b) Definitions. As used in this section, the following terms shall\nhave the following meanings:\n (1) "Qualified production costs" means production costs only to the\nextent such costs are attributable to the use of tangible property or\nthe performance of services within the state directly and predominantly\nin the production (including pre-production and post-production) of a\nqualified commercial.\n (2) "Production costs" means any costs for tangible property used and\nservices performed directly and predominantly in the production\n(including pre-production and post-production) of a qualified\ncommercial. "Production costs" shall not include (i) costs for a story,\nscript or scenario to be used for a qualified commercial and (ii) wages\nor salaries or other compensation for writers, directors, including\nmusic directors, producers and performers (other than background actors\nwith no scripted lines who are employed by a qualified company and\nmusicians). "Production costs" generally include technical and crew\nproduction costs, such as expenditures for commercial production\nfacilities and/or location costs, or any part thereof, film, audiotape,\nvideotape or digital medium, props, makeup, wardrobe, commercial\nprocessing, camera, sound recording, scoring, set construction,\nlighting, shooting, editing and meals. For purposes of this section,\n"post production costs" include the production of original content for a\nqualified commercial employing techniques traditionally used in\npost-production for visual effects, graphic design, animation, and\nmusical composition. However, where the commercial consists in its\nentirety of techniques such as visual effects, graphic design, or\nanimation, such costs incurred in the production of the commercial, when\noccurring in New York, shall be deemed qualified production costs for\nthe purposes of this section. Provided further, however, that "post\nproduction costs" shall not include the editing of previously produced\ncontent for a qualified commercial.\n (3) "Qualified commercial" means an advertisement that is recorded on\nfilm, audiotape, videotape or digital medium in New York for\nmulti-market distribution by way of radio, television networks, cable,\nsatellite or motion picture theaters. "Qualified commercial" shall not\ninclude (i) news or current affairs program, interview or talk program,\nnetwork promos, i.e., commercials promoting television series or movies,\n"how-to" (i.e., instructional) commercial or program, commercial or\nprogram consisting entirely of stock footage, trailers promoting\ntheatrical films, sporting event or sporting program, game show, award\nceremony, daytime drama (i.e., daytime "soap opera"), or "reality"\nprogram, or (ii) a production for which records are required under\nsection 2257 of title 18, United States code, to be maintained with\nrespect to any performer in such production (reporting of books,\ncommercials, etc. with respect to sexually explicit conduct).\n (4) "Qualified commercial production company" is a corporation,\npartnership, limited partnership, or other entity or individual which or\nwho is principally engaged in the production of a qualified commercial\nand controls the production of the qualified commercial and is not the\ndistributor or contracting entity for production of such commercial.\n ** (c) Cross-references. For application of the credit provided for in\nthis section, see the following provision of this chapter:\n (1) article 9-A: section 210: subdivision 38.\n (2) article 22: section 606: subsection (jj).\n ** NB Effective until January 1, 2015\n ** (c) Cross-references. For application of the credit provided for in\nthis section, see the following provision of this chapter:\n (1) article 9-A: section 210-B: subdivision 23.\n (2) article 22: section 606: subsection (jj).\n ** NB Effective January 1, 2015\n * NB There are 2 § 28's\n