NY lawmakers to vote on tax incentives
Allocation would grow by $70 million if approvedNEW YORK -- After three months' delay due to political in-fighting, New York State lawmakers are expected on Thursday to finally vote on state budget provisions that include multi-year production tax credits.
The state assembly and senate were supposed to adopt a final budget bill based on the governor's proposal by April 1, but political conflict and chaos dragged out the budget process.
Lawmakers in the state assembly and senate have passed parts of the budget in piecemeal fashion in recent days. Democratic legislators early this week made some changes to a revenue generation bill that included a five-year continuation of a 30% tax credit for film and TV productions.
The governor's original proposal for the revenue generation portion of the budget bill included a continuation through 2014, an increase in the annual allocation to $420 million and some fine-tuning of eligibility criteria designed to focus the benefits on state businesses. These details are believed to be in tact in the current version of the bill.
The $420 million a year, or $2.1 billion over five years, would be larger than the one-time $350 million production incentives allocation made last year that ended up being exhausted earlier this year.
New York state bills must sit for three days before being eligible for a vote. Lawmakers are expected to start voting around 12:01am ET to finish the process before the planned summer break of the state legislature. Governor David Paterson can approve or reject the bill after changes that lawmakers made to his original proposal.
As first outlined by Paterson, the budget provisions envision not only a funding boost but also meet the industry's demands for a longer-term commitment that many say is key to attracting TV shows.
The entertainment industry here has successfully touted an Ernst & Young study that has shown that past production incentives have boosted New York's tax revenue and led to job creation. Plus, the state doesn't have to shell out money ahead of time -- instead paying well after projects are finished.
According to industry research, the state not only creates jobs but also gets $1.90 in tax revenue for every dollar of tax credits, which generally get redeemed only one or two years after film or TV money flows into the state.
Among the key incentives provisions and benefits of the original Paterson production incentives proposal:
-- The tweaks to the production tax credits on below-the-line costs should "enhance the state's return on investment," the governor's office has said. For example, tax credit recipients must conduct at least 10% of shooting days at a qualified New York facility, at least 75% of postproduction costs must be incurred in the state to be considered a qualified cost, and only purchases of taxable property and services from registered sales tax vendors are eligible in the credit calculation.
-- Productions must also either use an end-credit acknowledging financial support from New York state or provide a promotional video for New York as part of the film or DVD release.
-- In a potential further boost to the post-production industry, the incentives also include a 10% tax credit, for a $7 million allocation a year, for New York post-production of films shot out-of-state.