April 19, 2017

New York Extends Film Production Tax Credit

On April 10, 2017, New York Governor Andrew Cuomo signed into law the state budget for the 2018 fiscal year. Among many other things, the budget extends New York’s incentive program for the film industry for three years, to 2022. The program had been set to expire in 2019.

An important economic development tool, New York’s Film Production Tax Credit program (NYS Tax Law § 24) has been wildly successful in attracting film production to New York and creating film industry-related jobs throughout the State. The program provides certain tax incentives to companies that produce qualified feature films, television movies, and television series and pilots in New York State, and/or incur post-production costs in the State associated with the original creation of such productions. The 2018 budget continues to allocate $420 million per year for tax credits for the program (up to $25 million of which may be dedicated to encourage the growth of post-production industry in New York).

Under the Film Production Tax Credit program, film production companies may be eligible to receive a tax credit of 30% on qualified production and/or post-production costs incurred in New York State. An additional 10% tax credit is available on qualified labor expenses incurred in certain upstate counties, and a 5% increase in the tax credit is available for post-production costs incurred in upstate New York. To qualify for the production tax credit, a production company must film a substantial portion of the project in New York. The post-production tax credit is available where the project was filmed predominantly outside of New York, but the film production company contracts for the post-production work to be undertaken by a company in New York.

On the other side of the Hudson, New Jersey’s film production tax credit program remains in limbo—at least for now. Following the program’s expiration a year earlier, in 2016, Governor Christie vetoed the Garden State Film and Digital Media Jobs Act, which would have reinstated and enhanced the tax credits available in New Jersey for qualified film and digital media content production expenses, and revised and expanded film and digital media tax credit eligibility requirements. The legislation would have also required the New Jersey Economic Development Authority to study the prospect of developing a film production studio in North Jersey. The Garden State Film and Digital Media Jobs Act (S1053/A2562) had been reintroduced in the State Legislature, where it currently remains pending.

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