New York Expands Film Production Incentives

Categories: New York State Business NewsNew York State News

A lively film set in the heart of New York City, illustrating the expanded film production incentives.

News Summary

New York State has expanded its film and television production incentives by increasing the annual allocation from $700 million to $800 million. This includes a new $100 million fund for independent projects and additional incentives for productions hiring local musicians. The budget aims to maintain New York’s competitive edge in the film industry amid increased competition from California and a significant decline in production spending. Amendments also include expedited credit recovery and adjusted eligibility criteria for various incentives.

New York State has officially expanded its incentives for film and television production following the signing of the new state budget by Governor Kathy Hochul. The budget has increased the annual allocation for these incentives from $700 million to $800 million. This expansion is designed to make New York more competitive in the film industry, particularly amid growing competition from states like California.

A noteworthy addition in the new budget is a $100 million fund dedicated to independent film projects, which are defined as those not more than 51% owned by publicly traded companies. These incentives are set to remain in effect until 2036, potentially encouraging both large and small productions to choose New York as their filming location.

In an effort to boost the local economy, productions that hire musicians for music scoring will benefit from an additional 10% incentive, provided they employ at least five musicians within New York State. This is aimed at not only supporting the film industry but also the local music scene.

The base incentive for production projects has been set at 30% of qualifying expenses, with additional “regional step-ups” available to further encourage filming in specific areas of the state. For projects with budgets under $10 million, $20 million has been earmarked, while $80 million is allocated for larger projects exceeding that budget threshold.

Additionally, a newly introduced “Production Plus Program” will enhance incentives for companies that submit two or more applications totaling $100 million in qualified production costs, offering a 10% increase in their incentive status. The previous cap of $500,000 on above-the-line labor costs has been eliminated, giving productions more operational freedom, though the overall cap of 40% on below-the-line and vendor costs remains.

Amendments in the budget also include changes to the requirements for post-production credits, which now necessitate either 75% of post-production costs to be spent in New York or a minimum of $1 million in such costs. Eligibility criteria for VFX and animation-only credits have been lowered to 10% of the budget or $500,000 spent within the state.

Starting January 1, 2025, productions will benefit from an expedited recovery of credits, allowing them to claim credits allocation in the same fiscal year without the previous three-year wait for credits over $5 million.

These measures have been praised by industry leaders, with a focus on maintaining New York’s competitive edge compared to other states, particularly California, which is working to expand its own film incentive program. The state’s initiative aims to mitigate a significant decline in production spending, projected to drop 15% since 2019, and a decrease in applications by 53% over the last five years.

Concerns surrounding the effectiveness of the state’s film incentives have also been voiced. Some lawmakers have pointed out that the return on investment from certain incentive programs has been low, prompting discussions about reevaluating the effectiveness of these initiatives. Some have suggested potential reductions to underperforming programs as the state considers its long-term goals for film production.

The broader context includes President Donald Trump’s proposals for new federal tax credits aimed at U.S. productions, which, along with potential tariffs on imported content, have raised concerns within the industry. In the face of these changes and ongoing competition from California, New York’s new budget reflects a comprehensive approach to securing its position as a leading destination for film and television production.