EMPIRE STATE COMMERCIAL PRODUCTION TAX CREDIT


FIRST TIME APPLICANTS PLEASE NOTE: If you are applying to this program for the first time this year (for your 2012 spend), you should first submit a sample application covering one or two commercials only to the Office for review. This will help ensure you are fully understanding and complying with requisite accounting and reporting practices using a small sample before attempting to complete your application covering the full 2012 year’s worth of commercials.

 

Call 212-803-2330 with any questions or for assistance in preparing your sample application.

 

How the Tax Credit Works

 

New York State now offers fully-refundable tax credits to qualified commercial production companies shooting commercials within the state. There are three component credit programs—an Upstate program, a Downstate program, and a Growth program. In the Upstate and Downstate programs, after meeting certain minimum annual thresholds (see below), a company can earn 5% on qualified expenditures on qualified commercials. In the Growth program a company can earn 20% on any incremental increase in qualified costs from one year to the next.

 

 

WHO CAN APPLY? 

 

The credit will be available to companies which are ‘principally engaged in and control the production of’ qualified commercials in New York State. That is, a company must be responsible for payment of the direct production expenses, and must be the signatory to contracts with the payroll service, facilities and vendors, etc. utilized in the production of the qualified commercials. It does not matter where a company’s headquarters are located so long as the production takes place and costs are incurred in New York. A company, such as an advertising agency, which contracts for the production of, or is the distributor of, a qualified commercial, is not eligible to apply for the credit.

 

WHAT KINDS OF PRODUCTIONS ARE ELIGIBLE? 

 

For a commercial project to be eligible for the New York State credit, at least 75% of the production costs (excluding post production costs) paid or incurred directly and predominantly in the actual filming or recording of the qualified commercial be must be qualified production costs incurred in New York State. 

 

 “Qualified commercials” are advertisements recorded on film, audiotape, videotape or digital medium in New York for multi-market distribution by way of radio, television networks, cable, satellite or motion picture theaters. Certain categories of productions are excluded from the program, including but not limited to news or current affairs programs, interview or talk program, network promos, “how-to” (instructional) commercial or program, commercial or program consisting primarily of stock footage, trailers promoting theatrical films, sporting event or program, game show, award ceremony, daytime drama, reality program, music videos. Unless specifically exempted from this restriction, qualified commercials should not be more than 180 seconds in length.

 

WHAT COSTS ARE ELIGIBLE? 

 

 

“Qualified production costs” are advertisements recorded on film, audiotape, videotape or digital medium in New York for multi-market distribution by way of radio, television networks, cable, satellite or motion picture theaters. Certain categories of productions are excluded from the program, including but not limited to news or current affairs programs, interview or talk program, network promos, “how-to” (instructional) commercial or program, commercial or program consisting primarily of stock footage, trailers promoting theatrical films, sporting event or program, game show, award ceremony, daytime drama, reality program, music videos. Unless specifically exempted from this restriction, qualified commercials should not be more than 180 seconds in length.

 

 

WHAT ARE THE COMPONENT PROGRAMS? 

 

 

The Empire State Commercial Production Credit is comprised of three different component programs: the Downstate program, the Upstate program, and the Growth program.  

 

All three programs are based on a calendar year’s worth of productions. A qualified production company will submit an application detailing costs incurred on all qualified commercials produced between January 1 and December 31 of the year being applied for. In the case of the Growth program, companies* will also need to submit applications detailing previous years’ costs. (*first time applicants)

 

All three programs are pro rata. That is, if the amount of credits claimed by all applicants to one of the three component programs exceeds the annual allocation for that program, then the amount of actual credit allocated to each applicant will be computed according to their relative share of the total annual allocation for that program.

 

The programs have different threshold requirements, annual allocations and credit calculations, as detailed below.

 

“Metropolitan Commuter Transportation District” The Downstate and Upstate programs are defined in part by the Metropolitan Commuter Transportation District (MCTD) as described in Section 1262 of the Public Authorities Law. The MCTD includes the city of New York, and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester.

 

Downstate Credit The Downstate program provides a refundable 5% tax credit for qualified commercial companies which film or record qualified commercials within the Metropolitan Commuter Transportation District (MCTD).

 

 

 

 

 

Upstate Credit The Upstate program provides a refundable 5% tax credit for qualified commercial companies which film or record qualified commercials outside the MCTD but within New York State.

 

 

 

 

 

Growth Credit  The Growth program provides a refundable 20% tax credit based on year-to-year growth in a qualified production company’s qualified production costs. It does not matter where in NY State the qualified costs were incurred.

 

In the first year an applicant applies to the Growth program, a qualified commercial production company will need to demonstrate that the total of all qualified costs attributable to the production of qualified commercials during calendar year 2012 was greater than the total of all similar costs incurred in 2011. The amount of the credit will be equal to twenty percent of the increase only. In subsequent years, applicants will average two and ultimately three previous years’ qualified costs to establish a baseline against which growth is measured NOTE: INSTRUCTIONS FOR THE GROWTH PROGRAM PERTAIN TO FIRST TIME APPLICANTS TO THE GROWTH PROGRAM. IF YOU APPLIED TO PROGRAM IN A PREVIOUS YEAR, AND ARE APPLYING FOR THE GROWTH PROGRAM IN 2013 (for 2012) YOU SHOULD SO INDICATE ON FORM A. IT IS NOT NECESSARY TO RESUBMIT DOCUMENTATION FOR 2009 AND/OR 20010 AND/OR 2011.

 

 

 

 

 

HOW IS THE CREDIT RECEIVED?

 

For commercials completed in 2012, applications must be submitted between January 2, 2013 and April 1, 2013. Applicants* applying for the Growth credit for 2012 must fill out applications for all qualified commercials completed in 2011 as well as for 2012.
(*first time applicants only)

After April 1, 2013, the Office will review all applications received for each of the three component programs. Once the total amount of credits earned in each component program has been determined, the Office will calculate the pro rata value of each application and a Certificate of Tax Credit will be issued to the applicant.

The applicant will include this certificate in their next New York State tax return, and the credit will be applied to the applicant’s state tax liability. If the amount of the credit exceeds the applicant’s tax liability for that year, 50% of the amount of the credit will be refunded to the applicant. In the subsequent tax year, the applicant will file with 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 Forms & Regulations

 Instructions for Application (PDF)
 

Form A: Application (PDF)
 

Form B: Schedule of Qualified Expenses *

Form C: Qualified Costs *

Form D: Annual Totals *

Form E: Employment Report *

Form F: Annual Employment Totals *
* MS Excel format. These forms must be downloaded to your PC prior to filling them out.


Regulations Governing the Empire State Commercial Production Tax Credit Program  

The New York State Empire State Commercial Production Tax Credit program is administered by the New York State Governor’s Office for Motion Picture and Television Development. For more information, contact the office at (212) 803-2330.