N.Y. Tax Law § 24-c: New York city musical and theatrical production tax credit

* § 24-c. New York city musical and theatrical production tax credit.

(a) (1) Allowance of credit. A taxpayer that is a qualified New York

city musical and theatrical production company, or is a sole proprietor

of or a member of a partnership that is a qualified New York city

musical and theatrical production company, and that 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 (d) 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 paid for

during the qualified New York city musical and theatrical production's

credit period. Provided however that the amount of the credit cannot

exceed three hundred fifty thousand dollars per qualified New York city

musical and theatrical production in a level two qualified New York city

production facility and three million dollars per qualified New York

city musical and theatrical production in a level one qualified New York

city production facility. In no event shall a qualified New York city

musical and theatrical production be eligible for more than one credit

under this program.

(3) No qualified production expenditures used by a taxpayer either as

the basis for the allowance of the credit provided 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 New York city musical and theatrical production" means

a for-profit live, dramatic stage presentation that, in its original or

adaptive version, is performed in a level one or level two qualified New

York city production facility, whether or not such production was

performed in a level one or level two qualified New York city production

facility prior to the state disaster emergency pursuant to executive

order two hundred two of two thousand twenty, provided, however, that

productions performing in a level two qualified New York city production

facility shall have a production budget greater than or equal to seven

hundred fifty thousand dollars and incur qualified production

expenditures greater than or equal to seven hundred fifty thousand

dollars.

(2) "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 of New York, 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 a level one or level two qualified New York city

production facility, or any part thereof, props, make-up, wardrobe,

costumes, equipment used for special and visual effects, sound

recording, set construction, and lighting. Qualified production

expenditure does not include any costs incurred prior to the credit

period of a qualified New York city musical and theatrical production

company.

(3) (i) "Level one qualified New York city production facility" means

a facility located within the (A) borough of Manhattan, bounded by and

including forty-first street and fifty-fourth street and between sixth

avenue and ninth avenue in which live theatrical productions are or are

intended to be primarily presented, (B) that contains at least one

stage, a seating capacity of five hundred or more seats, and dressing

rooms, storage areas, and other ancillary amenities necessary for the

qualified musical and theatrical production, and (C) for which receipts

attributable to live theatrical productions constitute seventy-five

percent or more of gross receipts of the facility.

(ii) "Level two qualified New York city production facility" means a

facility located within the borough of Manhattan (A) in which live

theatrical productions are or are intended to be primarily presented,

(B) that contains at least one stage, a seating capacity of one hundred

or more seats, and dressing rooms, storage areas, and other ancillary

amenities necessary for the qualified musical and theatrical production,

and (C) for which receipts attributable to live theatrical productions

constitute seventy-five percent or more of gross receipts of the

facility.

(4) "Qualified New York city 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 that is to be

performed in a level one or level two qualified New York city production

facility.

(5) (i) "The credit period of a qualified New York city musical and

theatrical production company" is the period starting on the production

start date and ending on the earlier of the date the qualified musical

and theatrical production has expended sufficient qualified production

expenditures to reach its credit cap, September thirtieth, two thousand

twenty-seven or the date the qualified musical and theatrical production

closes.

(ii) "The production start date" is the date that is up to twelve

weeks prior to the first performance of the qualified musical and

theatrical production.

(6) "Production budget" means all estimated costs to be incurred or

paid before the first public appearance.

(c) The credit shall be allowed for the taxable year beginning on or

after January first, two thousand twenty-one but before January first,

two thousand twenty-eight. A qualified New York city musical and

theatrical production company shall claim the credit in the year in

which its credit period ends.

(d) 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 57;

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

(e) 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 qualified New

York city musical and theatrical production company entitled to claim

this credit and the amount of the credit earned by such company.

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

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

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

this chapter shall be five hundred fifty million dollars. Such aggregate

amount of credits shall be allocated by the department of economic

development among taxpayers based on the date of first performance of

the qualified musical and theatrical production.

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

the commissioner, shall promulgate regulations to establish procedures

for the allocation of tax credits as required by this section. Such

rules and regulations shall include provisions describing the

application process, the due dates for such applications, the standards

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

will be provided by applicants to substantiate to the department the

amount of qualified production expenditures of such applicants, 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. In no event shall a qualified New York city musical and

theatrical production submit an application for this program after June

thirtieth, two thousand twenty-seven.

(g) Any qualified New York city musical and theatrical production

company that performs in a level one or level two qualified New York

city production facility and applies to receive a credit under this

section shall be required to: (1) participate in a New York state

diversity and arts job training program; (2) create and implement a plan

to ensure that their production is available and accessible for low-or

no-cost to low income New Yorkers; and (3) contribute to the New York

state council on the arts, cultural program fund an amount up to fifty

percent of the total credits received if its production earns ongoing

revenue prospectively after the end of the credit period that is at

least equal to two hundred percent of its ongoing production costs, with

such amount payable from twenty-five percent of net operating profits,

such amounts payable on a monthly basis, up until such fifty percent of

the total credit amount is reached. Any funds deposited pursuant to this

subdivision may be used for arts and cultural grant programs of the New

York state council on the arts as specified in subdivision five of

section ninety-nine-ll of the state finance law.

* NB Repealed January 1, 2028