News Summary
New York Governor Kathy Hochul has signed a budget to boost film and television production with expanded tax incentives. These changes aim to enhance competitiveness amid declining production rates and increased national competition. The new incentives will be in effect until 2036, allocating $800 million for projects, especially focusing on independent films. The adjustments to regulations aim to streamline applications and incentivize more productions. As such policies seek to revitalize the state’s film industry, some experts debate the efficacy of current tax incentives compared to state revenue returns.
New York City — New York Governor Kathy Hochul has signed a new state budget that includes expanded incentives aimed at boosting film and television production in the state. The decision comes in light of increased national competition for production as well as a noted decline in production rates in recent years. The state’s move arrives during a week that saw heightened discussions surrounding tariffs on imported content, proposed by Donald Trump, which has raised concerns in the film industry about the impact on U.S. productions.
The boosted incentives aim to make New York an attractive destination for filmmakers by extending and refining the existing tax credit programs. The new incentives will last through 2036, further expanding support for producers, especially independent projects and music scoring costs. Under the new guidelines, productions that employ five or more musicians in New York State can earn an added 10% incentive.
New York’s base incentive stands at 30%, with opportunities for additional regional increases. The annual budget allocation for these incentives has been elevated by $100 million, bringing the total to $800 million. Of this increase, $20 million is earmarked specifically for projects with budgets under $10 million, while $80 million is allocated for larger productions. However, independent production companies are restricted to submitting only two applications per year under the new regulations.
Additionally, the Production Plus Program provides extra tax credits for larger projects, granting a 10% boost for productions that have spent $100 million or more associated with two or more applications. In an effort to streamline the process, the cap on Above-the-Line (ATL) costs has been removed, although a 40% cap on Below-the-Line (BTL) and vendor costs still remains in place. Furthermore, costs related to post-production are now eligible for a post-only credit if 75% of the post-production budget, or a minimum of $1 million, is expended within New York.
The current changes also include relaxed eligibility requirements for VFX/Animation-only credits, reducing the thresholds for budgets spent in New York, thus encouraging more productions to qualify. Another significant aspect of the new legislation is a proposal that allows for immediate claims on tax credits within the first year of production, as opposed to the previous multi-year wait which had been a source of frustration for many.
These expansions respond to a concerning trend for the state, marked by a 15% expected drop in production rates since 2019 and a notable 53% decline in applications for state tax credits over the last five years. Hochul’s efforts are crucial as competition intensifies not only from other states but particularly from New Jersey, where incentive programs can sum up to 39% of production costs.
The Motion Picture Association has backed Hochul’s initiative, highlighting the critical role that film and television production plays in creating jobs and bolstering economic activity in local communities across New York. However, some experts have criticized the effectiveness of the tax incentive system, arguing that the returns in tax revenue do not proportionately match the substantial investments made by the state.
As New York seeks to reclaim its status as a premier location for film and television production, the changes in incentive policies signify a strategic pivot in response to a rapidly evolving industry landscape, marked by fierce competition and the ongoing economic challenges facing the creative sector.
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HERE Resources
New York Doubles Film and Television Subsidy to $800 Million
New York Expands Film and TV Tax Incentives
New York Increases Film and Television Subsidy Cap
New York Governor Proposes $100 Million Increase in Film Tax Credits
New York State Reaches $254 Billion Budget Agreement
April Tax Deadline Approaches for New Yorkers
Additional Resources
- Deadline: New York Film & TV Production Incentives
- Wikipedia: Film Incentive
- National Law Review: New York Film & TV Tax Incentive Enhancements
- Google Search: New York Film Tax Incentives
- Times Union: New York Rethinks Film Tax Incentives
- Google Scholar: New York Film Tax Incentives
- WGRZ: New York Taxpayers Fuel Film Industry
- Encyclopedia Britannica: New York Film Industry
