News Summary
Governor Kathy Hochul has signed a new budget for New York that extends film and television production incentives through 2036. This comprehensive package aims to support the entertainment industry amidst rising competition from other states, featuring enhanced benefits for music scoring costs and independent projects. With funding jumping to $800 million, the budget introduces a ‘Production Plus Program’ for larger productions, while also removing caps on above-the-line labor costs. The modifications seek to invigorate job creation and economic growth within the state as the film industry navigates new federal pressures.
New York—Governor Kathy Hochul has signed the state budget that includes expanded incentives for film and television production, marking a significant move amidst heightened competition from other states and ongoing discussions about national tax policies. This new legislation arrives on the heels of U.S. tariffs proposed by Donald Trump, which could heavily impact productions based outside the country.
The New York State Assembly and Senate approved the budget earlier this week, with discussions regarding the new incentives in progress for nearly a year. The film incentives package is designed to bolster the state’s entertainment industry by extending support through the year 2036. This plan notably expands eligibility for music scoring costs, adding an additional 10% incentive for productions that hire five or more musicians residing in New York State.
New York offers a base incentive of 30% for film productions, supplemented by regional incentives depending on where filming takes place. The state’s funding for film and television production has increased from $700 million to $800 million. Of this allocation, $100 million is designated for independent projects, with $20 million available for films with budgets under $10 million, and $80 million for those exceeding that threshold.
Once the allocated funds for independent projects are exhausted, no further applications will be accepted within that fiscal year. Furthermore, independent production companies are restricted to submitting two applications per year for funding. The new budget introduces a “Production Plus Program” that provides a 10% incentive increase for entities that submit multiple applications totaling $100 million or more in eligible production costs within New York until the end of 2028.
Another key change is the removal of the cap on above-the-line labor costs, which previously limited expenses to $500,000 per individual. However, the 40% cap on below-the-line costs remains in effect. Changes to the post-only credit requirements will now require that 75% of post-production costs, or at least $1 million, must be spent in New York for productions to qualify for tax credits. Additionally, the eligibility criteria for VFX/Animation-only credits have been lessened from requiring 20% of the budget or $3 million spent in New York to only 10% or $500,000.
Producers can now claim credits in the allocation year, improving the timeline for accessing these incentives compared to the previous requirement of spreading credits over three years for amounts exceeding $5 million. These modifications aim to streamline the process and address some of the delays that have affected filmmakers across the board, both major studios and independent creators alike.
The urgency for these new incentives is highlighted by New York’s competition with states such as New Jersey, which currently offers a 39% incentive on production costs, and California, which is working on increasing its annual film and TV incentive cap to $750 million while expanding qualifying production categories.
The pressure from the White House, which has proposed a potential 120% import tax on foreign content, has triggered concern across the film industry, both domestically and internationally. At the same time, Jon Voight, appointed as the Special Ambassador to Hollywood by Trump, has suggested that new federal tax credits for U.S. productions could complement state programs and protect the industry’s future.
The discussion surrounding New York’s film tax incentive program has often been contentious, especially regarding its economic impact and return on investment. However, local officials and industry leaders are optimistic that the recent amendments will encourage job creation and stimulate economic growth in the state, recognizing the potential benefits of a thriving entertainment sector.
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