FILM TAX CREDIT PROGRAM

Program Purpose

The New York State Film Tax Credit Program is designed to increase the film production and post-production industry presence and overall positive impact on the State’s economy.  

Program Highlights

The Film Tax Credit Program provides incentives to qualified production companies that produce feature films, television series, relocated television series, television pilots, films for television, and/or incur post-production costs associated with the original creation of these productions. Program credits of $420 million per year can be allocated and used to encourage companies to produce film projects in New York and help create and maintain film industry jobs. Of the $420 million, there is a set-aside for the post-production credit that will be increased from the current $7 million to $25 million per year beginning in 2015.

Production companies may be eligible to receive a fully refundable credit of 30 percent of qualified production costs and post-production costs incurred in New York State (NYS). An additional 5 percent credit may be available for post-production costs incurred in Upstate NY, outside the Metropolitan Commuter Transportation District (MCTD). The MCTD includes New York City, Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties.

For the period 2015-2019, productions with budgets over $500,000 can receive an additional 10 percent credit on qualified labor expenses incurred in the following counties:

Albany, Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Cortland, Delaware, Erie, Essex, Franklin, Fulton, Genesee, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, Orleans, Oswego, Otsego, Schenectady, Schoharie, Schuyler, Seneca, St. Lawrence, Steuben, Tioga, Tompkins, Wayne, Wyoming, or Yates.

There is a maximum of $5 million per year that can be allocated for the additional 10 percent credit on qualified labor expenses.

Eligibility
The Program is limited to feature films, television series, relocated television series, television pilots and films for television.

The Film Production Tax Credit Program has two separate components: the Film Production Credit and the Post-Production Credit.

  • The production credit is available for companies that film a substantial portion of their project in NYS.
  • The post-production credit is available where the project was filmed predominantly outside of the State and the film production company contracts their post-production work to companies in NYS specializing in post-production work.

Film Production Credit

Qualified production costs are for tangible property or services used or performed with New York State directly and predominantly in the production of a qualified film. Qualified costs generally include most below-the-line items associated with production such as labor costs incurred on set construction, crew, camera equipment, film stock, and developing and printing of a film. Post-production costs such as film editing, sound design and effects, and visual effects may be qualified production costs for purposes of the film production credit.

Eligibility requirements vary based on the type of film company and the budget.

If the film has a production budget over $15 million or is being produced by a company in which more than 5 percent of the beneficial ownership is owned directly or indirectly by a publicly traded entity:

  • At least 10% of the total principal photography shooting days must be at a qualified production facility (QPF) in New York State
     

Pilots are exempted from the 10 percent principal photography day requirement. Pilots must shoot a minimum of one day of principal photography day at a QPF, and at least 75 percent of the total of all expenses related to work (excluding post-production) done at all facilities utilized by the Pilot must be related to work done at the QPF.

Productions with budgets of $15 million or less produced by companies that are independently owned must shoot at least one day of principal photography at a QPF.

If production costs are incurred at more than one production facility, then 75 percent of all qualified costs incurred at ALL facilities must be incurred at a qualified production facility. Qualified costs include all costs related to work done at the QPF, i.e., all set construction materials, set dressing, props, wardrobe, ground transport to/from set, meals, etc.

If a production has met the 75 percent test for production facility expenditures, it may also qualify for the credit based upon qualified expenditures outside the qualified facility that are related to pre-production, location production and post-production if:

  1. The production spends less than $3 million on all costs related to work done at a qualified production facility, then a minimum of 75 percent of the principal photography days shot on location must be in New York State. This threshold requirement applies to location days only. Principal shoot days at a facility must not be included in the calculation of the 75 percent; OR
  2. The production spends $3 million or more on all expenses related to work done at a qualified production facility, then all qualified expenditures related to pre-production, location production and post-production in NYS are eligible for calculating the credit.

Further definition of certain terms such as film production facility, qualified production facility and armories are provided in the Program Guidelines and Appendix A.

Post Production Credit

Post production costs associated with the production of original content for a qualified film that are incurred at a qualified post-production facility in New York State are eligible.

A qualified post-production facility is any company located in NYS and engaged in providing post-production services to film and television.

A film production company can qualify for the post-production credit if it meets either one or both of the following thresholds:

  1. Visual Effects and Animation – The qualified VFX/Animation costs incurred at a qualified post-production facility in NYS must EITHER meet or exceed:
    • 20 percent of the total VFX/Animation costs paid or incurred for VFX/Animation for the qualified film at any post-production facility anywhere; OR
    • $3 million
  2. Post-Production – The qualified post-production costs incurred at qualified facilities in NYS, (excluding cost for VFX/Animation), must meet or exceed 75 percent of the total qualified post-production costs paid or incurred in the post-production of the film at any post-production facilities.

NOTE: A film production company that is filming a substantial portion of its project in NYS can include post-production costs incurred in NYS in the calculation for the film production credit. The post-production credit is available to film production companies that film a substantial portion of a project outside NYS but are seeking to contract some or all of the post-production work to a facility in NYS. A Film production company cannot claim the film production credit and the post-production credit for the same qualified post production costs.

Application Process

Applicants can download application materials, complete and submit them via email to filmcredits@esd.ny.gov with the project title in the subject line of the email.

When submitting an application for either the Film Production Credit or Post-Production Credit, all materials as indicated in the chart below must be submitted in order for the application to be deemed complete. Refer to the Chart of Application Materials for the Tax Credit and Steps to the Tax Credit when completing an initial and final application.

Chart of Application Materials for the Film Tax Credit
Steps to the Tax Credit

For the Film Production Credit, applications must be submitted prior to the start of principal and ongoing photography. Applications for the Post-Production Credit should be filed prior to the start of principal photography on the qualified film, but generally NO LATER than the last day of principal photography, or, in the case of a television series, no later than the last day of principal photography on the first episode of the series.

When an initial application is deemed complete, the Program Office will notify an applicant that the project is eligible to submit a final application.

When the applicant completes the project through post-production, a final application must be submitted with actual project information. When the final application is deemed complete, the Program Office will notify an applicant that the application is ready for audit. After the audit, a Certificate of Tax Credit may be issued and sent to the applicant listed in the final application.

Applicants for 3rd Party CPA Review, Film Production Credit or Post Production Credit programs should read the Program Guidelines and Appendix A that contain detailed information about eligibility, qualified costs, the application process, application materials and key terms and definitions that are used in the statute, regulations and documents that comprise the application.

Program Guidelines
Appendix A

Third Party CPA Review of Final Application

Film producers applying for the film production credit can opt to have final applications reviewed by pre-qualified CPA firms and expedite approval

The overwhelming success of the New York State Film Production Tax Credit has brought record breaking numbers of film and television productions – and tax credit applications – into the State. To help address the influx of final applications, Empire State Development (ESD) is offering an optional, voluntary program for third party review of final applications. This voluntary initiative is available to film producers effective January 1, 2015. This procedure enables productions that choose to participate to have their final applications reviewed by pre-qualified CPA firms according to agreed-upon procedures (AUPs) established and published by ESD. The reviews and reports prepared by the pre-qualified CPA firms must be submitted as a supplement to a production’s final application.

ESD staff will review the final application for completeness and the CPA report for compliance with the agreed-upon procedures. This process will expedite the final approval by ESD and is expected to free up staff to work on productions that do not opt in, and will go a long way towards reducing the time it takes for all productions to receive their credits.


Application Materials for Download

The application consists of a several documents. There are separate application materials for the Film Production Credit and the Post-Production Credit. Refer to the Chart of Application Materials for the Film Tax Credit for a complete list of required application materials All application materials should be emailed to filmcredits@esd.ny.gov.

  • Budget Cost Qualifier (Excel file) – There are two Excel files, one for applicants to the Film Production Credit and the other for applicants to the Post-Production Credit. In addition, there is a Schedule of Qualified Expenditures that accompanies each Budget Cost Qualifier. A Budget Cost Qualifier must be submitted with an initial and final application.
  • Employment Report (Excel file) – This report is required of applicants to both the Film Production Credit and the Post-Production Credit and is submitted with the final application.
  • Shoot Days Summary (Excel file) – This report is only required of applicants to the Film Production Credit and is submitted with the final application.
  • End Credit Requirements – (pdf file) – There are two templates, one for applicants to the Film Production Credit and the other for applicants to the Post-Production Credit. This form submitted with a final application and must be signed by the applicant and emailed as a PDF.
  • Retained Assets Report (Excel file) – This report is only required of applicants to the Film Production Credit and is submitted with the final application.
  • Related Party Transaction Report (Excel file) – This report is only required of applicants to the Film Production Credit and is submitted with the final application.

***To request protection from FOIL for any information your business deems confidential, enclose a letter as a signed pdf with your application identifying with specificity any content the business deems to be confidential, proprietary, or a trade secret as defined in Article 6 of the Public Officers Law. ESD does not provide a template for FOIL Opt-Out Requests.


Film Production Credit
 

Project Summary (Initial/Final Application Forms) (pdf files) – There are two fillable pdf files for applicants to the Film Production Tax Credit.


Post Production Credit

 

Project Summary (Initial/Final Application Forms) (pdf files) – There are two fillable pdf files for applicants to the Post Production Tax Credit.

Regulations

The links below contain the recently updated regulations for the Program correcting a typographical error. These regulations will be available in the June 17, 2015 edition of the State Register. Interested parties wishing to comment on these regulations should contact Thomas Regan, Associate Counsel at tregan@esd.ny.gov by p.m. on Monday August 3. The links below show the revised paragraph in Section 170.2 (a) correcting the typographical error as well as a link to the entire regulation including this correction.

Film Regs Consensus Rulemaking
Film Regs FINAL

The link below contains the recently updated regulations for the Program. These regulations will be available in the June 10, 2015 edition of the State Register. Interested parties wishing to comment on these regulations should contact Thomas Regan, Associate Counsel at tregan@esd.ny.gov by p.m. on Friday July 10. A link to the revised Post Production Regulations is below.

Updated Proposed Post Production Tax Credit Regulations

Contact Information

If you are interested in more details or have specific questions about the Program, please contact the Film Tax Credit Program at (212) 803-2328 or via email at filmcredits@esd.ny.gov.


ADDITIONAL RESOURCES

www.nylovesfilm.com

 

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