Commercial Tax Credit Program

Commercial Tax Credit

Objective

The New York State Commercial Tax Credit Program is designed to increase the production of commercial filming in New York State (“NYS”).

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Overview

Overview

Credits of up to $7 million per year can be allocated to encourage qualified production companies to produce commercials in NYS and help create and maintain jobs. The $7 million per year consists of three components for companies: shooting commercials Downstate ($3 million), shooting Upstate ($3 million), and those demonstrating incremental "growth" in commercial production ($1 million).

An applicant can receive a credit of 5% on qualified production expenses under the Upstate and Downstate components of the Commercial Tax Credit Program.  An additional 20% credit is available under the Growth component for eligible incremental growth in production expenses from one year to the next.

Eligibility

The Program is limited to advertisements recorded on film, audiotape, videotape or digital medium in NYS for multi-market distribution by way of radio, television, or motion picture theaters. Certain productions are excluded, including but not limited to: news or current affairs programs, interview or talk programs, network promos, "how-to" (instructional) productions, stock footage, trailers promoting theatrical films, sporting events, game shows, award ceremonies, daytime dramas, reality programs, and music videos.

Qualified production costs are for tangible property or services used or performed within NYS directly and predominantly in the production (including pre- and post-production) of a qualified commercial. Qualified costs generally include most below-the-line items including costs of technical and crew production, expenditures for facilities, props, makeup, wardrobe, set construction, and background talent. Generally excluded are costs of stories and scripts, and wages for writers, directors, producers and performers (other than background extras).

Most post-production costs such as editing, sound editing, special effects, graphics, color timing, etc., are qualified, provided the applicant company controls the post-production and pays post-production vendors directly. Such costs shall not include the editing of previously produced content for a qualified commercial.  

Credit for Downstate ($3 million)
The Downstate component is based on filming or recording qualified commercials within the Metropolitan Commuter Transportation District (MCTD). The MCTD includes New York City, Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester counties.

  • More than $500,000 in total qualified costs attributable to the production of qualified commercials within the MCTD during the calendar year must be incurred
  • The amount of the credit is initially calculated as 5% of qualified production costs over the $500,000 threshold
  • Credits are distributed on a pro rata basis among applicants for the downstate credit

Credit for Upstate ($3 million)
The Upstate component is based on filming or recording of qualified commercials outside the MCTD but within NYS.

  • More than $100,000 in total qualified costs attributable to the production of qualified commercials outside the MCTD during the calendar year must be incurred
  • The amount of the credit is initially calculated as 5% of qualified production costs over the $100,000 threshold
  • Credits are distributed on a pro rata basis among applicants for the Upstate credit

Credit for Growth ($1 million)
The growth component is based on year-to-year growth in a company's qualified costs, regardless of where within NYS those costs are incurred.

The first year an applicant applies for the growth component, it must demonstrate that the total of all qualified costs attributable to the production of qualified commercials during the year was greater than the total of all similar costs incurred in the previous year. In subsequent years, applicants average two and ultimately three previous years' qualified costs to establish a baseline against which growth is measured. The current year costs must be greater than the baseline. The amount of the credit is initially calculated as 20% of the incremental growth in costs between the previous year and the current year.

  • The maximum growth credit a company can receive is $300,000
  • Credits are distributed on a pro-rata basis among applicants for the growth credit.

How to Apply

Application Process
The application forms and instructions for the commercial production credit for calendar year 2016 are available below.

Applications must be received by 5:00 p.m. April 3, 2017.

All applications received for each of the three components will be reviewed. Once the total amount of credits earned for each component of the Program has been determined, the pro rata value for each applicant will be calculated and a certificate of tax credit issued.

The certificate must be attached to a company's 2016 NYS tax return to be applied against its NYS tax liability. If the amount of the credit exceeds the tax liability for that year, 50% of the excess will be refunded to the applicant. In the subsequent tax year, the applicant will file for the remaining credit. If there is any amount of credit remaining in excess of the applicant' s tax liability for that year, it will be refunded. 

Application Materials
Save each file to your own computer first, then open and complete the saved files.

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 Resouces
www.nylovesfilm.com