FILM TAX CREDIT PROGRAM

CHANGES TO FILM TAX CREDIT REGULATIONS FOR PUBLIC COMMENT

New Proposed Film Tax Credit Regulations: 2014

The above proposed regulations contain changes to the current film regulations and are subject to public comment. Please send any comments to Thomas Regan, Associate Counsel at tregan@esd.ny.gov by  5pm on Monday, March 31, 2014. Thank you.


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 and television movies, and/or incur post-production costs associated with the original creation of these film productions. Program credits of $420 million a 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 $420M, there is a set-aside for the post-production credit that will be increased from the current $7M to $25M per year beginning in 2015.

Film production companies may be eligible to receive a credit of 30 percent of qualified production costs incurred in New York State and 35% of post-production costs if incurred in Upstate NY. Additional credits are available beginning in 2015 for labor expenses incurred in certain counties in upstate New York.


Eligibility

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

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 any of the abundant supply of 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, and camera equipment, film stock, 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 publicly traded entity:

    • At least 75% of the total spend at production facilities (excluding post-production costs) must be qualified costs incurred at a qualified facility in New York State; AND
    • At least 10% of the total principal photography shooting days must be at a qualified facility in New York State
       
  • Smaller productions with budgets of $15 million or less produced by companies that are independently owned must meet the 75% rule for costs incurred at a qualified facility but not the 10% requirement for principal photography. However, at least one shoot day must be on a stage built for the production at a qualified facility.
     
  • For productions that spend less than $3 million at a qualified facility in the State, at least 75% of the principal photography shooting days must be spent in New York State.


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 must be located in the State and engaged in finishing a qualified film.

To qualify for the post-production credit, a film production company must spend at least 75% of its total post-production costs, EXCLUDING THE COSTS OF VISUAL EFFECTS AND ANIMATION, at a post-production facility or facilities in New York State.


Visual Effects and Animation

Costs for visual effects and animation are treated separately from all other post-production costs and there is a separate eligibility threshold. Visual effects and animation costs qualify for a credit if either 20% or $3 million of all such costs are incurred in NYS. If both the 75% rule AND the 20% or $3 million eligibility threshold can be met, then all qualified post-production costs incurred in the State can be used when determining the credit.


Application Process

The process consists of an initial application that is submitted prior to the start of a project and a final application that is submitted after a project is completed.


Film Production Credit

Initial applications must be submitted prior to the start of principal and ongoing photography.


Post Production Credit

Initial applications 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.


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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