New York City Musical and Theatrical Production Tax Credit

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Overview

The $200 million New York City Musical and Theatrical Production Tax Credit is a program designed to jump-start the entertainment industry and support tourism in New York City. The Program will offset some of the costs associated with producing a show as New York’s economy recovers from the COVID-19 pandemic.

Qualified production companies can receive tax credits of 25% of qualified production expenditures. Companies that apply with a first paid performance date prior to January 1, 2023 can receive up to $3 million per production. Companies applying with a first performance date on or after January 1, 2023 are capped at $1.5 million unless the tourism industry does not recover. If indicators show that the tourism economy in New York City is not fully recovered, then the cap remains at $3 million per production. Productions must occur in a qualified production facility in New York City.

Companies must implement a New York State-approved diversity and arts jobs training plan and take actions to increase access to productions for low-income residents. Highly successful productions, those showing ongoing revenues more than two times their ongoing production costs after receiving a tax credit, will be required to contribute to the NYS Council for The Arts Cultural Program Fund, up to 50% of the tax credit.        

The Program is for three years and companies can receive credits for tax years beginning on or after January 1, 2021 but before January 1, 2024. Initial applications must be submitted prior to the first public performance and before June 30, 2023 and final project summaries no later than 90 days after the production closes or 90 days following the program end date of September 30, 2023, whichever comes first.

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Eligibility

To qualify, a Musical and Theatrical Production generally must be a live, scripted performance with one or multiple performers that, in its original or adaptive version, is performed in a qualified production facility in New York City

Ballet, opera, musical solo, group, band or orchestra performances, or stand-up comedy performances are not eligible.

Eligible expenditures for qualified productions include:

  • Production costs for sets, costumes, wardrobes, makeup, accessories and costs associated with sound, lighting and staging.
  • Salaries, wages, fees, and other compensation, including related benefits for services performed. Total allowable expenses are not to exceed $200,000 per week.
  • Technical and crew production costs, such as expenditures for qualified production facilities.
  • Up to 50% of the advertising and marketing costs incurred and paid in NYS by the applicant.

The credit period of a qualified production begins on the production start date, up to 12 weeks before the first paid performance, and ends on the earliest of the following options:

  1. the credit cap has been reached;
  2. the production closes; or
  3. September 30, 2023 – the program end date.
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How To Apply

Applications must be submitted prior to the first paid performance. Submission no later than 10 days prior to such performance is highly encouraged.

The initial application consists of:

  • Project Summary
  • Production and operating budgets
  • Weekly Payroll Report
  • A diversity and arts job training program plan outlining proposed method(s) of participating in a New York state diversity and arts job training program
    • Click here for information on how to list fellowship opportunities with SUNY schools statewide 
  • A public access and availability plan outlining the ways the applicant will ensure that their production is available and accessible for low-or no-cost to low income New Yorkers 
  •  The applicant must agree (on Project Summary) to contribute to the New York State Council on the Arts Cultural Program Fund if ongoing revenues are more than two times ongoing production costs after receiving a tax credit.

Applicants should review the Program Guidelines carefully and consult the Chart of Application Materials before submission of an application. Guidelines contain detailed information about eligibility, qualified costs, application process, materials and regulations that govern the Program.

Click here to complete and submit an initial application.

Final project summaries must be submitted to the Department no later than 90 days after the production closes or 90 days following the program end date of September 30, 2023, whichever comes first. If a qualified production company chooses to have its final application reviewed by a pre-qualified CPA firm, the final project summary must be submitted to the pre-qualified CPA firm selected to review the final application by the due date above and the Department must be notified by the qualified production company that the final application will be submitted to such firm.

The final application consists of:

Third Party CPA Review of Final Application

Producers applying for the NYC Musical and Theatrical Production Tax Credit can opt to have final applications reviewed by pre-qualified CPA firms and expedite approval.

ESD staff will review the final application for completeness and the CPA report for compliance with the agreed-upon procedures.

Profit Distribution

Applicants may be required to contribute a portion of their profits from their productions to the New York State Council on the Arts Cultural Program Fund.

If an applicant’s credit period ends and the production is ongoing, then an applicant must begin evaluating profits to determine if a portion of the profits need to be contributed to the Fund.  The file below should be downloaded, completed and provided to ESD on a quarterly basis. The file is set up to track ongoing revenues, ongoing cost, net profits and payments.

Profit Distribution Calculator

The credit period ends on the earliest of the following:

  1. the date the production has expended sufficient qualified production expenditures to reach its credit cap;
  2. September 30, 2023; or
  3. the date the qualified production closes.

If a production closes before the credit cap is reached or before September 30, 2023, the evaluation of profits and payments to the fund are not required.

For more detailed information about whether your production is subject to this requirement, when evaluation of profits must begin, how to track the information, and payment options, please refer to the Program guidelines.

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Regulations

New York City Musical and Theatrical Production Tax Credit Program Regulations

The proposed/emergency regulations above contain edits to the NYC Musical and Theatrical Tax Credit Program. If you wish to comment on these changes, please send your comments in writing to Thomas Regan, Associate Counsel at [email protected] by August 16, 2022 at 5PM.

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Contact

If you have questions about the Program, please contact the NYC Musical and Theatrical Tax Credit Program at (212) 803-2328 or via email at [email protected].