28 - Empire state commercial production credit.

* §  28.  Empire  state commercial production credit. (a) Allowance of  credit.   (1) A taxpayer which  is  a  qualified  commercial  production  company,  or  which  is  a  sole  proprietor  of  a qualified commercial  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,  pursuant to  the  provisions  referenced  in  subdivision  (d)  of  this  section,  to be computed as provided in this section. Provided, however,  to be eligible for such credit, at least  seventy-five  percent  of  the  production  costs  (excluding  post  production  costs) paid or incurred  directly and predominantly in the actual filming  or  recording  of  the  qualified commercial must be costs incurred in New York state.    (2)  The state has annually seven million dollars in total tax credits  to disburse to all eligible commercial production companies.  The  seven  million  dollars  in  total  tax credits shall be allocated according to  subparagraphs (i), (ii) and (iii) of this paragraph:    (i) The state annually will disburse three million of the total  seven  million  in  tax  credits  to  all eligible production companies and 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 percent of  the qualified production costs paid or incurred in the production  of  a  qualified  commercial, provided that the qualified production costs paid  or incurred are attributable to the use  of  tangible  property  or  the  performance  of  services  within  the  state  in the production of such  qualified commercial. To be eligible for said credit the total qualified  production costs of a qualified production company must  be  greater  in  the  aggregate  during the current calendar year than the average of the  three previous  years  for  which  the  credit  was  applied.  Provided,  however,  that  until  a  qualified production company has established a  three year history, the credit will be based on either the previous year  or the average of the two previous years, whichever period is longer for  the qualified production company seeking the credit.  If  the  qualified  production company has never applied for the growth credit, the previous  year's  data will be used to create a benchmark. The tax credit shall be  applied only to the amount of the total qualified  production  costs  of  the  current  calendar  year  that  are greater than the total amount of  production costs of the appropriate measurement period as  described  in  this  subparagraph.  The  tax  credit  must  be  distributed to eligible  production companies on a pro rata basis,  provided,  however,  that  no  such  qualified production company shall receive more than three hundred  thousand dollars annually for such credit. The credit shall  be  allowed  for  the  taxable  year  in  which  the  production  of  such  qualified  commercial is completed.    (ii) The state annually will disburse three million of the total seven  million in tax credits to all eligible production companies who film  or  record   qualified   commercials   within   the   metropolitan  commuter  transportation district as defined in section twelve  hundred  sixty-two  of  the  public  authorities  law. 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  five percent of the qualified production costs paid or  incurred in the production of a qualified commercial, provided that  the  qualified  production costs paid or incurred are attributable to the use  of tangible property or the performance of services within the state  in  the  production  of  such  qualified commercial. To be eligible for said  credit the total qualified production costs of  a  qualified  production  company  must  be  greater  than  five  hundred  thousand dollars in the  aggregate during the calendar year.  Such  credit  will  be  applied  to  qualified  production costs exceeding five hundred thousand dollars in a  calendar year.(iii) The state annually will disburse one million of the total  seven  million  in tax credits to all eligible production companies who film or  record a qualified  commercial  outside  of  the  metropolitan  commuter  transportation  district  as defined in section twelve hundred sixty-two  of  the  public  authorities  law. 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  five percent of the qualified production costs paid or  incurred in the production of a qualified commercial, provided that  the  qualified  production costs paid or incurred are attributable to the use  of tangible property or the performance of services within the state  in  the  production  of  such  qualified commercial. To be eligible for said  credit the total qualified production costs of  a  qualified  production  company  must  be  greater  than  two  hundred  thousand  dollars in the  aggregate during the calendar year.  Such  credit  will  be  applied  to  qualified  production  costs exceeding two hundred thousand dollars in a  calendar year.    (3) No qualified production costs used by a  taxpayer  either  as  the  basis for the allowance of the credit provided for under this section or  used  in  the  calculation of the credit provided for under this section  shall be used by  such  taxpayer  to  claim  any  other  credit  allowed  pursuant to this chapter.    Notwithstanding  any  provisions  of  this  section to the contrary, a  corporation or partnership, which otherwise  qualifies  as  a  qualified  commercial  production  company,  and  is  similar  in  operation and in  ownership to a  business  entity  or  entities  taxable,  or  previously  taxable, under section one hundred eighty-three, one hundred eighty-four  or  one  hundred  eighty-five  of  article nine; article nine-A, article  thirty-two or thirty-three of this chapter  or  which  would  have  been  subject  to  tax  under  article  twenty-three  of this chapter (as such  article was in effect on January first, nineteen hundred eighty) or  the  income  or losses of which is or was includable under article twenty-two  of this chapter shall not be deemed a  new  or  separate  business,  and  therefore  shall  not be eligible for empire state commercial production  benefits, if it was not formed for a valid  business  purpose,  as  such  term  is  defined  in clause (D) of subparagraph one of paragraph (o) of  subdivision nine of section two hundred eight of this  chapter  and  was  formed   solely  to  gain  empire  state  commercial  production  credit  benefits.    (b) Definitions. As used in this section, the  following  terms  shall  have the following meanings:    (1)  "Qualified  production  costs" means production costs only to the  extent such costs are attributable to the use of  tangible  property  or  the  performance of services within the state directly and predominantly  in the production (including pre-production and  post-production)  of  a  qualified commercial.    (2)  "Production costs" means any costs for tangible property used and  services  performed  directly  and  predominantly  in   the   production  (including   pre-production   and   post-production)   of   a  qualified  commercial. "Production costs" shall not include (i) costs for a  story,  script  or scenario to be used for a qualified commercial and (ii) wages  or salaries or other  compensation  for  writers,  directors,  including  music  directors, producers and performers (other than background actors  with no scripted lines who are  employed  by  a  qualified  company  and  musicians).  "Production  costs"  generally  include  technical and crew  production  costs,  such  as  expenditures  for  commercial   production  facilities  and/or location costs, or any part thereof, film, audiotape,  videotape  or  digital  medium,  props,  makeup,  wardrobe,   commercial  processing,   camera,   sound   recording,  scoring,  set  construction,lighting, shooting, editing and meals. For  purposes  of  this  section,  "post production costs" include the production of original content for a  qualified   commercial   employing   techniques  traditionally  used  in  post-production  for  visual  effects,  graphic  design,  animation, and  musical composition. However,  where  the  commercial  consists  in  its  entirety  of  techniques  such  as  visual  effects,  graphic design, or  animation, such costs incurred in the production of the commercial, when  occurring in New York, shall be deemed qualified  production  costs  for  the  purposes  of  this  section.  Provided further, however, that "post  production costs" shall not include the editing of  previously  produced  content for a qualified commercial.    (3)  "Qualified commercial" means an advertisement that is recorded on  film,  audiotape,  videotape  or  digital  medium  in   New   York   for  multi-market  distribution  by way of radio, television networks, cable,  satellite or motion picture theaters. "Qualified commercial"  shall  not  include  (i) news or current affairs program, interview or talk program,  network promos, i.e., commercials promoting television series or movies,  "how-to" (i.e., instructional)  commercial  or  program,  commercial  or  program   consisting  entirely  of  stock  footage,  trailers  promoting  theatrical films, sporting event or sporting program, game  show,  award  ceremony,  daytime  drama  (i.e.,  daytime  "soap  opera"), or "reality"  program, or (ii) a production  for  which  records  are  required  under  section  2257  of  title  18,  United States code, to be maintained with  respect to  any  performer  in  such  production  (reporting  of  books,  commercials, etc. with respect to sexually explicit conduct).    (4)  "Qualified  commercial  production  company"  is  a  corporation,  partnership, limited partnership, or other entity or individual which or  who is principally engaged in the production of a  qualified  commercial  and  controls  the production of the qualified commercial and is not the  distributor or contracting entity for production of such commercial.    (c) Cross-references. For application of the credit  provided  for  in  this section, see the following provision of this chapter:    (1) article 9-A: section 210: subdivision 38.    (2) article 22: section 606: subsection (jj).    * NB Repealed December 31, 2011    * NB There are 2 § 28's