With New Jersey nipping at its heels and producers complaining about tardy payouts, New York Gov. Kathy Hochul’s latest budget for New York State, out Wednesday, raises the tax credit for film and television production back to 30%, boosts the annual cap to $700 million, modifies payout terms and attempts to lure TV production from other states in a new incentive package that would run through 2034.
The changes, which must be approved by legislators, are meant to draw filming to the state. A key provision would increase the credit from 25% to 30% for eligible production and post-production. The credit had been lowered by former Gov. Andrew Cuomo in 2020, just as other states were increasing their tax incentive programs.
Under the proposal for the state’s 2024 fiscal year that starts April 1, New York would:
∙ Raise its annual cap from $420 million to $700 million.
∙ Make above-the-line wage costs eligible, with restrictions: It would cap credit at $150,000 per individual. Qualified above the line wages capped for each production at 40% of other qualified production expenses.
∙ Modify payout rules, allowing businesses to get paid sooner. Delays in payment have devalued the credit and created negative messaging around the ability of New York to pay out. The payout will now occur before the later of (1) the taxable year the production of the qualified film is complete, or (2) the taxable year for which the film has been allocated credit (versus the tax year immediately following the allocation year).
∙ Incentivize the relocation of TV series that are filming elsewhere with a 5% bump for two years. Series need to have filmed 6+ episodes in other jurisdictions before relocating to NYS. A required minimum budget of $1,000,000 per episode — intended to weed out smaller productions.
There was no change requiring a film budget of $1 million in NYC for tax credit eligibility. Filmmakers have called that a high bar in a city with deep ties to independent film, which has been going elsewhere. However, the minimum budget is only $250k north of Westchester County.
NY remains a big prodution destination but other states have been ramping up incentives. Neighboring New Jersey under Gov. Phil Murphy has put in place 30%-35% tax credit and is building out infrastrcture, including recent deals to add a new Netflix studio complex in Fort Monmouth and a Lionsgate-anchored studio with Great Point in Newark. Molly Conner’s independent film and television production company Phiphen Pictures late last year opened Phiphen Studios, a boutique post-production and office space in Englewood Cliffs.
New York City’s film commissioners, in an interview with Deadline in December, said they were looking to ramp up efforts to help productions with a “reset” of the process from permitting, scouting and parking to a liason in every city office and regular meetings of a new council of industry professionals.
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