Objective
The Film Production Tax Credit program is designed to incentivize the film production industry in New York State and thereby to increase its positive impact on the State’s economy.
New York State Film Tax Credit Program (Production)
Overview
Program Highlights
To encourage production companies to film in New York, productions which comply with requirements may be eligible for a tax credit of 30% percent of qualified production expenses. Qualified expenses include certain above-the-line wages subject to a cap, below-the-line wages, and production costs directly related to the production of a qualified film. This tax credit is funded at $700 million a year through 2036.
A production company that undertakes multiple productions in New York may be eligible for an additional 5-10% on qualified expenses, through participation in Production Plus +.
Productions with a minimum budget of $500,000 may receive an additional 10% credit on qualified labor expenses, including qualified above-the-line wages, in the counties listed below. In addition, all qualified costs incurred in those counties may be eligible for the 10% credit if the production company shoots more than 50% of principal photography days in any of the following counties:
Albany, Allegany, Broome, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia, Cortland, Delaware, Dutchess, Erie, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, Orange, Orleans, Oswego, Otsego, Putnam, Rensselaer, Saratoga, Schenectady, Schoharie, Schuyler, Seneca, St. Lawrence, Steuben, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Wyoming, or Yates.
A production may receive an additional 10% credit for scoring costs if the production’s scoring costs include payment to a minimum of five musicians.
The program incentivizes the relocation of series to NYS by allowing certain qualified productions to claim, for the first season in NYS after relocation, certain qualified relocation costs as qualified production costs up to a cap of $6 million.
The NYS Independent Film Production Tax Credit Program is a separate program that is available to qualified independent film production companies. Applicants must apply for the program within the application windows as specified on its website. Independent film production companies are also eligible to apply for the Film Production Tax Credit Program. A film production company cannot claim the film production credit and the Independent Film production credit for the same project.
Eligibility
Eligibility
The Program is limited to qualified feature-length films, television series, relocated television series, television pilots, and films for television.
"Qualified film" shall not include (i) a documentary film, news or current affairs program, interview or talk program, "how-to" (i.e., instructional) film or program, film or program consisting primarily of stock footage, sporting event or sporting program, game show, award ceremony, film or program intended primarily for industrial, corporate or institutional end-users, fundraising film or program, daytime drama (i.e., daytime "soap opera"), commercials, music videos or "reality" program, (ii) a production for which records are required under section 2257 of title 18, United States code, to be maintained with respect to any performer in such production (reporting of books, films, etc. with respect to sexually explicit conduct), or (iii) other than a relocated television production, a television series commonly known as variety entertainment, variety sketch and variety talk, i.e., a program with components of improvisational or scripted content (monologues, sketches, interviews), either exclusively or in combination with other entertainment elements such as musical performances, dancing, cooking, crafts, pranks, stunts, (iv) a compilation of short films or webisodes aggregated to meet either the definition of television film, television series, or of qualified films under these regulations.
The production credit is available for companies that film a substantial portion of their project in NYS.
To be eligible for Production Plus + enhancement with an additional 5-10% credit on multiple productions, a production company must EITHER:
- Be a qualified film production company that submits at least 2 applications with at least $100 million in qualified production costs. The company may be eligible to receive an additional 10% on all subsequent films or television series. (OR)
- Be a qualified independent film production company that submits at least 2 applications with at least $20 million in qualified production costs. The company may be eligible to receive an additional 5% on all subsequent films or television series.
Film Production Credit
Qualified production costs are for tangible property or services used or performed within New York State directly and predominantly in the production of a qualified film. Qualified costs include certain above-the-line salaries subject to a cap, i.e., ATL qualified salaries cannot exceed 40% of all other qualified costs, and most below-the-line items associated with production such as set construction, crew, camera equipment, grip equipment, props, etc. Post-production costs such as film editing, sound design and effects, and visual effects may be qualified costs for purposes of the film production credit.
Eligibility requirements vary based on the type of film, production company and the budget.
A qualified film whose majority of principal photography shooting days in the production of the qualified film are shot in Westchester, Rockland, Nassau, or Suffolk County or any of the five New York City boroughs shall have a minimum budget of $1 million. A qualified film whose majority of principal photography shooting days in the production of the qualified film are shot in any other county of the state than those listed in the preceding sentence shall have a minimum budget of $250,000.
If the film is being produced by a company which is majority owned by a publicly traded entity and/or has a budget of more than $15 Million, at least 10% of the total principal photography shooting days must be at a qualified production facility (QPF) in New York State.
- These productions must film at a Level 2 qualified production facility in NYC or any qualified production facility outside of NYC.
Productions by companies that are not majority owned by a publicly traded company and with a budget of $15 Million or less must shoot at least one day of principal photography at a QPF.
- These productions can film at any qualified production facility in NYS.
If a non-qualified production facility (in NYS or out of state) is used by the production company, at least 75 percent of the total of all expenses related to work (excluding post-production) done at all facilities anywhere must be related to work done at the QPF.
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.
If a production has met the 75 percent requirement for qualified production facility expenditures it may also qualify for credit based upon qualified expenditures outside the qualified facility that are related to pre-production, location production and post-production if:
- 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
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The production spends $3 million or more on all expenses related to work done at a qualified production facility, then there is no 75 percent threshold for principal photography on location in NYS. 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.
With respect to music scoring in New York State, if a production hires and pays a minimum of 5 musicians for scoring, all costs related to music scoring may receive an additional 10% credit.
NOTE: A film production company filming a substantial portion of its project in NYS can include post-production costs incurred in NYS in the calculation of the film production credit for which it has applied.
The post-production credit is available to film production companies that film a substantial portion of a project outside NYS but interested in contracting 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 project.
How to Apply
Application Process
Applicants complete and submit the Project Summary Form online. All other documents which comprise a complete application (see Chart of Application Materials for the Film Tax Credit) are submitted through the secure file transfer system. See Application Instructions document. It is highly recommended that applications be submitted at least 10 business days prior to the start of principal photography.
When submitting an application for Film 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 when completing an initial and final application.
Chart of Application Materials for the Film Tax Credit
For the Film Production Credit, applications must be submitted prior to the start of principal and ongoing photography.
When an initial application is deemed complete, the Department 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 Department reviews the application. After the review, a Certificate of Tax Credit may be issued and sent to the applicant listed in the final application.
Effective January 1, 2023, applicants to the NY State Film Production Tax Credit Program are required to file a diversity plan outlining specific goals and strategies for hiring a diverse workforce. The diversity plan will also indicate whether the applicant intends to participate in training, education, and recruitment programs that are designed to promote and encourage the training and hiring in the film and television industry of New York residents who represent the diversity of the State's population. See guidelines for instructions and information related to the diversity plan.
As part of the application process, productions are required to submit data on the gender and race/ethnicity of workers as well as the vendors they contract with. Empire State Development has created these tracking sheets as a tool that production companies may use in addition to existing employment data productions may have on their workforce and vendors in order to collect diversity impact data. These forms are for the production’s internal data collection purposes only and should not be submitted to Empire State Development.
Third Party CPA Review of Final Application
Film producers applying for the film production tax credit can opt to have final applications reviewed by pre-qualified CPA firms and expedite approval.
Empire State Development (ESD) offers an optional, voluntary program for third party review of final applications. This procedure enables productions that so choose, 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.
- Pre-Qualified CPA firms
- Procedures and Performance Standards
- Agreed Upon Procedures - Film Production Program
- Qualified Cost Summary - Film Production Program
- Third Party Checklist - Film Production Program
Application Materials
- Project Summary - Film Production Credit - Initial Application (Online Application Form)
- Film - Initial Application Template Book - The Film Production Credit Initial Application Template file contains the following templates for submission via the online application:
- Budget Cost Qualifier - Summary Page
- Budget Cost Qualifier - Detail Page
- Budget Cost Qualifier - Relocation Costs
- Schedule of Qualified Expenditures
- Supplement to the Schedule of Qualified Expenditures
- Employment Practices Form
- Project Summary - Film Production Credit - Final Application (Online Application Form)
- End Credit Requirements
- Film - Final Application Template Book - The Film Production Credit Final Application Template file contains the following templates for submission via the online application:
- Budget Cost Qualifier – Summary Page
- Budget Cost Qualifier - Detail Page
- Budget Cost Qualifier - Relocation Costs
- Schedule of Qualified Expenditures
- Supplement to the Schedule of Qualified Expenditures
- Employment Report – Summary Page
- Employment Report – Detail Page
- Shoot Days Summary
- Retained Assets Report
- Related Party Transaction Report
- Diverse Vendor Report.
- Workforce Utilization Report
Regulations
The Empire State Film Production Regulations are in the process of being updated.
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 [email protected].