N.Y. Tax Law § 24-a: Musical and theatrical production credit

* § 24-a. Musical and theatrical production credit. (a)(1) Allowance

of credit. A taxpayer which is a qualified musical and theatrical

production company, or which is a sole proprietor of or a member of a

partnership which is a qualified musical and theatrical production

company, and which is subject to tax under article nine-A or twenty-two

of this chapter, shall be allowed a credit against such tax, pursuant to

the provisions referred to in subdivision (c) of this section, and to be

computed as provided in this section.

(2) The amount of the credit shall be the product (or pro rata share

of the product, in the case of a member of a partnership) of twenty-five

percent and the sum of the qualified production expenditures and the

transportation expenditures.

(3) No qualified production expenditures or transportation

expenditures used by a taxpayer either as the basis for the allowance of

the credit provided for pursuant to this section or used in the

calculation of the credit provided pursuant to this section shall be

used by such taxpayer to claim any other credit allowed pursuant to this

chapter.

(b) Definitions. As used in this section, the following terms shall

have the following meanings:

(1) "Qualified musical and theatrical production" means a for-profit

live, dramatic stage presentation in a qualified production facility,

certified pursuant to rules and regulations promulgated by the

department of economic development, as a qualified touring production.

(2) "Qualified touring production" means a live, dramatic stage

production that, in its original or adaptive version, is performed in a

qualified production facility, and has begun or will begin a tour,

consisting of eight or more shows in three or more localities.

(3) "Qualified production expenditure" means any costs for tangible

property used and services performed directly and predominantly in the

production of a qualified musical and theatrical production within the

state including: (i) expenditures for design, construction and

operation, including sets, special and visual effects, costumes,

wardrobes, make-up, accessories and costs associated with sound,

lighting, and staging, (ii) all salaries, wages, fees, and other

compensation including related benefits for services performed of which

the total allowable expense shall not exceed two hundred thousand

dollars per week, and (iii) technical and crew production costs, such as

expenditures for qualified production facilities, or any part thereof,

props, make-up, wardrobe, costumes, equipment used for special and

visual effects, sound recording, set construction, and lighting.

(4) "Qualified production facility" means a facility located in the

state but outside the city of New York (i) in which live theatrical

productions are or are intended to be primarily presented, (ii) that

contains at least one stage, a seating capacity of one thousand or more

seats, and dressing rooms, storage areas, and other ancillary amenities

necessary for the qualified musical and theatrical production, (iii) for

which receipts attributable to ticket sales constitute seventy-five

percent or more of gross receipts of the facility, and (iv) which is not

a licensee, or affiliated with a licensee, of the New York state gaming

commission under the racing, pari-mutuel wagering and breeding law.

(5) "Qualified musical and theatrical production company" is a

corporation, partnership, limited partnership, or other entity or

individual which or who is principally engaged in the production of a

qualified musical or theatrical production and performs in a qualified

production facility.

(6) (i) "Transportation expenditures" means transportation

expenditures incurred and paid directly and predominantly in the

production of a qualified musical and theatrical production. Such

expenditures shall include the packaging, crating, and transportation

within the state for use in a qualified theater production of sets,

costumes, or other tangible property constructed or manufactured in and

out of state, and the transportation of the cast and crew within the

state. Such term shall include the packaging, crating, and transporting

within the state of property and equipment used for special and visual

effects, sound, lighting and staging, costumes, wardrobes, make-up and

related accessories and materials, as well as any other performance or

production-related property and equipment.

(ii) Transportation expenditures shall not include any costs to

transport property and equipment to be used only for filming and not in

a qualified theater production, any indirect costs, and expenditures

that are later reimbursed by a third party, or any amounts that are paid

to persons or entities as a result of their participation in profits

from the exploitation of the production.

(c) Cross-references. For application of the credit provided for in

this section, see the following provisions of this chapter:

(1) article 9-A: section 210-B: subdivision 47.

(2) article 22: section 606: subsection (u).

(d) Notwithstanding any provision of this chapter, (i) employees and

officers of the department of economic development and the department

shall be allowed and are directed to share and exchange information

regarding the credits applied for, allowed, or claimed pursuant to this

section and taxpayers who are applying for credits or who are claiming

credits, including information contained in or derived from credit claim

forms submitted to the department and applications for certification

submitted to the department of economic development, and (ii) the

commissioner and the commissioner of the department of economic

development may release the names and addresses of any taxpayer claiming

this credit and the amount of the credit earned by the taxpayer.

Provided, however, if a taxpayer claims this credit because it is a

member of a limited liability company or a partner in a partnership,

only the amount of credit earned by the entity and not the amount of

credit claimed by the taxpayer may be released.

(e) Maximum amount of credits. (1) The aggregate amount of tax

credits allowed under this section, subdivision forty-seven of section

two hundred ten-B and subsection (u) of section six hundred six of this

chapter in any calendar year shall be eight million dollars. Such

aggregate amount of credits shall be allocated by the department of

economic development among taxpayers in order of priority based upon the

date of filing an application for allocation of musical and theatrical

production credit with such department. If the total amount of allocated

credits applied for in any particular year exceeds the aggregate amount

of tax credits allowed for such year under this section, such excess

shall be treated as having been applied for on the first day of the

subsequent year.

(2) The commissioner of economic development, after consulting with

the commissioner, shall promulgate regulations by October thirty-first,

two thousand fourteen to establish procedures for the allocation of tax

credits as required by subdivision (a) of this section. Such rules and

regulations shall include provisions describing the application process,

the due dates for such applications, the standards which shall be used

to evaluate the applications, the documentation that will be provided to

taxpayers to substantiate to the department the amount of tax credits

allocated to such taxpayers, and such other provisions as deemed

necessary and appropriate. Notwithstanding any other provisions to the

contrary in the state administrative procedure act, such rules and

regulations may be adopted on an emergency basis if necessary to meet

such October thirty-first, two thousand fourteen deadline.

(f) The department of economic development shall submit to the

governor, the temporary president of the senate, and the speaker of the

assembly, an annual report to be submitted on February first of each

year evaluating the effectiveness of the musical and theatrical

production tax credit provided by this section in stimulating the growth

of the musical and theatrical industry in the state. Such report shall

include, but need not be limited to, in total and by qualified musical

and theatrical production, the number of qualified musical and

theatrical productions which received a musical and theatrical

production credit, the qualified production expenditures, the

transportation expenditures, the qualified production facilities, and

the credit amounts claimed by each qualified musical and theatrical

production, as well as the impact on employment and the economy of the

state. Such report shall include (1) the credit-eligible man hours for

each project and the total wages for such credit-eligible man hours for

each project as well as the name of each taxpayer allocated a tax credit

for each project and the county of residence or incorporation of such

taxpayer or, if the taxpayer does not reside or is not incorporated in

New York, then the state of residence or incorporation; provided

however, if the taxpayer claims a tax credit because the taxpayer is a

member of a limited liability company, a partner in a partnership or a

shareholder in a subchapter S corporation, the name of each limited

liability company, partnership or subchapter S corporation earning any

of those tax credits must be included in the report instead of

information about the taxpayer claiming the tax credit; and (2) the

amount of tax credit allocated to each taxpayer; provided, however, if

the taxpayer claims a tax credit because the taxpayer is a member of a

limited liability company, a partner in a partnership or a shareholder

in a subchapter S corporation, the amount of tax credit earned by each

entity must be included in the report instead of information about the

taxpayer claiming the tax credit, and information identifying the

project associated with each taxpayer for which a tax credit was claimed

under this section, including the name of the musical and theatrical

production and county in which the production is performed must be

included in such report. Such report shall be based on data available

from the application filed with the department of economic development

for allocation of musical and theatrical production credits.

Notwithstanding any provision of law to the contrary, the information

contained in the report shall be public information. The report may also

include any recommendations of changes in the calculation or

administration of the credit, and any other recommendation of the

commissioner of the department of economic development regarding

continuing modification, repeal of such act, and such other information

regarding the act as the commissioner of the department of economic

development may feel useful and appropriate.

* NB Repealed January 1, 2030