S T A T E O F N E W Y O R K
________________________________________________________________________
2670--B
2017-2018 Regular Sessions
I N A S S E M B L Y
January 20, 2017
___________
Introduced by M. of A. LENTOL, TITONE, COLTON, BRINDISI, NIOU, HARRIS,
McDONALD, CARROLL, COOK, JENNE, PEOPLES-STOKES, HEVESI, JAFFEE,
D'URSO, ABBATE, BLAKE, CRESPO, MORELLE -- Multi-Sponsored by -- M. of
A. HYNDMAN -- read once and referred to the Committee on Ways and
Means -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- again reported from said
committee with amendments, ordered reprinted as amended and recommit-
ted to said committee
AN ACT to amend the tax law and the economic development law, in
relation to the creation of the empire state music production credit
and the empire state digital gaming media production credit; to repeal
subdivision 13 of section 352 of the economic development law relating
thereto; and providing for the repeal of certain provisions upon expi-
ration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The tax law is amended by adding a new section 44 to read
as follows:
§ 44. EMPIRE STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT.
(1) A TAXPAYER WHICH IS A MUSIC PRODUCTION ENTITY ENGAGED IN QUALIFIED
MUSIC PRODUCTION, OR WHO IS A SOLE PROPRIETOR OF OR A MEMBER OF A PART-
NERSHIP, WHICH IS A MUSIC PRODUCTION ENTITY ENGAGED IN QUALIFIED MUSIC
PRODUCTION, AND IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF
THIS CHAPTER, SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX TO BE COMPUTED
AS PROVIDED HEREIN.
(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 OR LIMITED
LIABILITY COMPANY) OF TWENTY-FIVE PERCENT AND THE ELIGIBLE PRODUCTION
COSTS OF ONE OR MORE QUALIFIED MUSIC PRODUCTIONS.
(3) ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION
INCURRED AND PAID IN THIS STATE BUT OUTSIDE SUCH METROPOLITAN COMMUTER
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03921-07-7
A. 2670--B 2
TRANSPORTATION DISTRICT SHALL BE ELIGIBLE FOR A CREDIT OF TEN PERCENT OF
SUCH ELIGIBLE PRODUCTION COSTS IN ADDITION TO THE CREDIT SPECIFIED IN
PARAGRAPH TWO OF THIS SUBDIVISION.
(4) ELIGIBLE PRODUCTION COSTS SHALL NOT INCLUDE THOSE COSTS USED BY
THE TAXPAYER OR ANOTHER TAXPAYER AS THE BASIS CALCULATION OF ANY OTHER
TAX CREDIT ALLOWED UNDER THIS CHAPTER OR ALLOWED IN ANY OTHER STATE.
(B) ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED
UNDER THIS SECTION, SUBDIVISION FIFTY-THREE OF SECTION TWO HUNDRED TEN-B
AND SUBSECTION (III) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER IN ANY
TAXABLE YEAR SHALL BE FIFTY MILLION DOLLARS. THE AGGREGATE AMOUNT OF
CREDITS FOR ANY TAXABLE YEAR SHALL BE DISTRIBUTED ON A REGIONAL BASIS AS
FOLLOWS: FIFTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS SHALL BE
AVAILABLE FOR QUALIFIED MUSIC PRODUCTIONS THAT INCUR AT LEAST SIXTY
PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION IN
REGION ONE; TWENTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS SHALL BE
AVAILABLE FOR QUALIFIED MUSIC PRODUCTIONS THAT INCUR AT LEAST SIXTY
PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION IN
REGION TWO; AND THIRTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS SHALL
BE AVAILABLE FOR QUALIFIED MUSIC PRODUCTIONS THAT INCUR AT LEAST SIXTY
PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION IN
REGION THREE. IF SUCH REGIONAL DISTRIBUTION IS NOT FULLY ALLOCATED IN
ANY TAXABLE YEAR, THE REMAINDER OF SUCH CREDITS SHALL BE AVAILABLE FOR
ALLOCATION TO ANY REGION IN THE SUBSEQUENT TAX YEAR. FOR THE PURPOSES
OF THIS SECTION REGION ONE SHALL CONTAIN THE CITY OF NEW YORK; REGION
TWO SHALL CONTAIN THE COUNTIES OF WESTCHESTER, ROCKLAND, NASSAU AND
SUFFOLK; AND REGION THREE SHALL CONTAIN ANY COUNTY NOT CONTAINED IN
REGIONS ONE AND TWO. SUCH CREDIT SHALL BE ALLOCATED BY THE EMPIRE STATE
DEVELOPMENT CORPORATION AMONG TAXPAYERS IN ORDER OF PRIORITY BASED UPON
THE DATE OF FILING AN APPLICATION FOR ALLOCATION OF MUSIC PRODUCTION
CREDITS WITH SUCH OFFICE. 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
TAXABLE YEAR.
(C) DEFINITIONS. AS USED IN THIS SECTION:
(1) "MUSIC PRODUCTION" MEANS THE CREATION OF A SOUND RECORDING AND ANY
RELATED MUSIC VIDEO, EITHER OF WHICH IS INTENDED FOR COMMERCIAL RELEASE.
A "MUSIC PRODUCTION" DOES NOT INCLUDE RECORDINGS THAT ARE PRIMARILY
SPOKEN WORD OR WILDLIFE OR NATURE SOUNDS, OR PRODUCED FOR INSTRUCTIONAL
USE OR ADVERTISING OR PROMOTIONAL PURPOSES.
(2) "QUALIFIED MUSIC PRODUCTION" IS A MUSIC PRODUCTION IN WHICH ELIGI-
BLE PRODUCTION COSTS EQUAL TO OR ARE IN EXCESS OF SEVEN THOUSAND FIVE
HUNDRED DOLLARS IF INCURRED AND PAID IN THIS STATE IN THE TWELVE MONTHS
PRECEDING THE DATE ON WHICH THE CREDIT IS CLAIMED. PROVIDED, HOWEVER, IF
SUCH PRODUCTION COSTS ARE INCURRED AND PAID OUTSIDE THE METROPOLITAN
COMMUTER TRANSPORTATION DISTRICT IN THIS STATE, SUCH PRODUCTION COSTS
SHALL BE EQUAL TO OR IN EXCESS OF THREE THOUSAND SEVEN HUNDRED FIFTY
DOLLARS TO BE A QUALIFIED MUSIC PRODUCTION FOR THE PURPOSES OF THIS
PARAGRAPH.
(3) (A) "ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED MUSIC PRODUCTION"
ARE COSTS INCURRED AND PAID IN THIS STATE FOR TANGIBLE PROPERTY AND
SERVICES USED IN THE PRODUCTION OF QUALIFIED MUSIC PRODUCTION, AS DETER-
MINED BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT, INCLUDING, BUT NOT
LIMITED TO: (I) STUDIO RENTAL FEES AND RELATED COSTS, (II) INSTRUMENT
AND EQUIPMENT RENTAL FEES, (III) PRODUCTION SESSION FEES FOR MUSICIANS,
A. 2670--B 3
PROGRAMMERS, ENGINEERS, AND TECHNICIANS AND (IV) MIXING AND MASTERING
SERVICES.
(B) ELIGIBLE PRODUCTION COSTS SHALL NOT INCLUDE: (I) COSTS FOR TANGI-
BLE PROPERTY OR SERVICES USED OR PERFORMED OUTSIDE OF THIS STATE, (II)
PERFORMANCE FEES FOR FEATURED ARTISTS OR FEATURED GUEST ARTISTS RECEIV-
ING ROYALTIES OR ADVANCES ON ROYALTIES OR SPECIAL PERFORMANCE FEES
(OTHER THAN THOSE THAT WOULD NORMALLY BE COLLECTED BY A PERFORMING
RIGHTS ORGANIZATION) PURSUANT TO AN AGREEMENT DIRECTLY WITH THE PRODUCER
OR EMPLOYER, (III) SALARIES OR RELATED COMPENSATION FOR PRODUCERS OR
SONGWRITERS, (IV) COMPOSER, ARTIST OR PRODUCER RESIDUAL ROYALTIES OR
ADVANCES, (V) LICENSING FEES FOR SAMPLES, (VI) INTERPOLATIONS OR OTHER
MUSIC CLEARANCE COSTS, (VII) MASTERING OR POST-PRODUCTION EXPENDITURES
FOR PROJECTS THAT WERE NOT PRINCIPALLY TRACKED AND RECORDED IN THIS
STATE, (VIII) ANY COSTS ASSOCIATED WITH MANUFACTURING, DUPLICATION,
PACKAGING, DISTRIBUTION, PROMOTION, MARKETING OR TOURING NOT SPECIF-
ICALLY OUTLINED IN THIS SUBPARAGRAPH, OR (IX) LOCAL TRANSPORTATION
EXPENDITURES DIRECTLY RELATED TO MUSIC PRODUCTION AND PROVIDED AT OR TO
THE SITE OF SUCH MUSIC PRODUCTION. WITH RESPECT TO THE PRODUCTION OF A
MUSIC VIDEO, ELIGIBLE PRODUCTION COSTS ARE THOSE DEFINED IN PARAGRAPH
TWO OF SUBDIVISION (B) OF SECTION TWENTY-FOUR OF THIS ARTICLE. SUCH
TOTAL PRODUCTION COSTS INCURRED AND PAID IN THIS STATE SHALL BE EQUAL TO
OR EXCEED SEVENTY-FIVE PERCENT OF TOTAL COST OF AN ELIGIBLE PRODUCTION
INCURRED AND PAID WITHIN AND WITHOUT THIS STATE.
(D) CROSS-REFERENCES. FOR APPLICATIONS OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
(1) ARTICLE NINE-A: SECTION TWO HUNDRED TEN-B, SUBDIVISION FIFTY-
THREE.
(2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLIV).
(3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (III).
§ 2. Section 210-B of the tax law is amended by adding a new subdivi-
sion 53 to read as follows:
53. EMPIRE STATE MUSIC PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-FOUR OF THIS CHAPTER
SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
FORTY-FOUR AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE
AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE
YEAR REDUCES THE TAX TO SUCH AMOUNT, THE EXCESS SHALL BE TREATED AS AN
OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER, PROVIDED,
HOWEVER, NO INTEREST SHALL BE PAID THEREON.
§ 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new clause (xliv) to read as
follows:
(XLIV) EMPIRE STATE MUSIC AMOUNT OF CREDIT UNDER
PRODUCTION CREDIT UNDER SUBDIVISION FIFTY-THREE
SUBSECTION (III) OF SECTION TWO HUNDRED TEN-B
§ 4. Section 606 of the tax law is amended by adding a new subsection
(iii) to read as follows:
A. 2670--B 4
(III) EMPIRE STATE MUSIC PRODUCTION CREDIT. (1) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-FOUR OF THIS CHAPTER
SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
FORTY-FOUR AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT-
ED OR REFUNDED AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
§ 5. The tax law is amended by adding a new section 45 to read as
follows:
§ 45. EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (A) ALLOW-
ANCE OF CREDIT. (1) A TAXPAYER WHICH IS A DIGITAL GAMING MEDIA
PRODUCTION ENTITY ENGAGED IN QUALIFIED DIGITAL GAMING MEDIA PRODUCTION,
OR WHO IS A SOLE PROPRIETOR OF OR A MEMBER OF A PARTNERSHIP, WHICH IS A
DIGITAL GAMING MEDIA PRODUCTION ENTITY ENGAGED IN QUALIFIED DIGITAL
GAMING MEDIA PRODUCTION, AND IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR
TWENTY-TWO OF THIS CHAPTER, SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX
TO BE COMPUTED AS PROVIDED HEREIN.
(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 OR LIMITED
LIABILITY COMPANY) OF TWENTY-FIVE PERCENT AND THE ELIGIBLE PRODUCTION
COSTS OF ONE OR MORE QUALIFIED DIGITAL GAMING MEDIA PRODUCTIONS.
(3) ELIGIBLE DIGITAL GAMING MEDIA PRODUCTION COSTS FOR A QUALIFIED
DIGITAL GAMING MEDIA PRODUCTION INCURRED AND PAID IN THIS STATE BUT
OUTSIDE SUCH METROPOLITAN COMMUTER TRANSPORTATION DISTRICT SHALL BE
ELIGIBLE FOR A CREDIT OF TEN PERCENT OF SUCH ELIGIBLE PRODUCTION COSTS
IN ADDITION TO THE CREDIT SPECIFIED IN PARAGRAPH TWO OF THIS SUBDIVI-
SION.
(4) ELIGIBLE PRODUCTION COSTS SHALL NOT INCLUDE THOSE COSTS USED BY
THE TAXPAYER OR ANOTHER TAXPAYER AS THE BASIS CALCULATION OF ANY OTHER
TAX CREDIT ALLOWED UNDER THIS CHAPTER OR ALLOWED IN ANY OTHER STATE.
(B) ALLOCATION OF CREDIT. THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED
UNDER THIS SECTION, SUBDIVISION FIFTY-FOUR OF SECTION TWO HUNDRED TEN-B
AND SUBSECTION (JJJ) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER IN ANY
TAXABLE YEAR SHALL BE FIFTY MILLION DOLLARS. THE AGGREGATE AMOUNT OF
CREDITS FOR ANY TAXABLE YEAR MUST BE DISTRIBUTED ON A REGIONAL BASIS AS
FOLLOWS: FIFTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS SHALL BE
AVAILABLE FOR QUALIFIED DIGITAL GAMING MEDIA PRODUCTIONS THAT INCUR AT
LEAST SIXTY PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED DIGITAL
GAMING MEDIA PRODUCTION IN REGION ONE; TWENTY PERCENT OF THE AGGREGATE
AMOUNT OF CREDITS SHALL BE AVAILABLE FOR QUALIFIED DIGITAL GAMING MEDIA
PRODUCTIONS THAT INCUR AT LEAST SIXTY PERCENT OF ELIGIBLE PRODUCTION
COSTS FOR A QUALIFIED DIGITAL GAMING MEDIA PRODUCTION IN REGION TWO; AND
THIRTY PERCENT OF THE AGGREGATE AMOUNT OF CREDITS SHALL BE AVAILABLE FOR
QUALIFIED DIGITAL GAMING MEDIA PRODUCTIONS THAT INCUR AT LEAST SIXTY
PERCENT OF ELIGIBLE PRODUCTION COSTS FOR A QUALIFIED DIGITAL GAMING
MEDIA PRODUCTION IN REGION THREE. IF SUCH REGIONAL DISTRIBUTION IS NOT
FULLY ALLOCATED IN ANY TAXABLE YEAR, THE REMAINDER OF SUCH CREDITS SHALL
BE AVAILABLE FOR ALLOCATION TO ANY REGION IN THE SUBSEQUENT TAX YEAR.
FOR THE PURPOSES OF THIS SECTION REGION ONE SHALL CONTAIN THE CITY OF
NEW YORK; REGION TWO SHALL CONTAIN THE COUNTIES OF WESTCHESTER, ROCK-
LAND, NASSAU AND SUFFOLK; AND REGION THREE SHALL CONTAIN ANY COUNTY NOT
CONTAINED IN REGIONS ONE AND TWO. SUCH CREDIT SHALL BE ALLOCATED BY THE
EMPIRE STATE DEVELOPMENT CORPORATION AMONG TAXPAYERS IN ORDER OF PRIORI-
TY BASED UPON THE DATE OF FILING AN APPLICATION FOR ALLOCATION OF
A. 2670--B 5
DIGITAL GAMING MEDIA PRODUCTION CREDIT WITH SUCH OFFICE. 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 TAXABLE YEAR.
(C) DEFINITIONS. AS USED IN THIS SECTION:
(1) "QUALIFIED DIGITAL GAMING MEDIA PRODUCTION" MEANS: (I) A WEBSITE,
THE DIGITAL MEDIA PRODUCTION COSTS OF WHICH ARE PAID OR INCURRED PREDO-
MINATELY IN CONNECTION WITH (A) VIDEO SIMULATION, ANIMATION, TEXT,
AUDIO, GRAPHICS OR SIMILAR GAMING RELATED PROPERTY EMBODIED IN DIGITAL
FORMAT, AND (B) INTERACTIVE FEATURES OF DIGITAL GAMING (E.G., LINKS,
MESSAGE BOARDS, COMMUNITIES OR CONTENT MANIPULATION); (II) VIDEO OR
INTERACTIVE GAMES PRODUCED PRIMARILY FOR DISTRIBUTION OVER THE INTERNET,
WIRELESS NETWORK OR SUCCESSORS THERETO; (III) ANIMATION, SIMULATION OR
EMBEDDED GRAPHICS DIGITAL GAMING RELATED SOFTWARE INTENDED FOR COMMER-
CIAL DISTRIBUTION REGARDLESS OF MEDIUM; AND (IV) A DIGITAL GAMING MEDIA
PRODUCTION IN WHICH QUALIFIED DIGITAL GAMING MEDIA PRODUCTION COSTS
EQUAL TO OR ARE IN EXCESS OF SEVEN THOUSAND FIVE HUNDRED DOLLARS IF
INCURRED AND PAID IN THIS STATE IN TWELVE MONTHS PRECEDING THE DATE ON
WHICH THE CREDIT IS CLAIMED. PROVIDED, HOWEVER, IF SUCH A PRODUCTION
COSTS ARE INCURRED AND PAID OUTSIDE THE METROPOLITAN COMMUTER TRANSPOR-
TATION DISTRICT IN THIS STATE, SUCH PRODUCTION COSTS SHALL BE EQUAL TO
OR IN EXCESS OF THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS TO BE A QUAL-
IFIED DIGITAL GAMING MEDIA PRODUCTION FOR PURPOSES OF THIS PARAGRAPH. A
QUALIFIED DIGITAL GAMING MEDIA PRODUCTION DOES NOT INCLUDE A WEBSITE,
VIDEO, INTERACTIVE GAME OR SOFTWARE THAT IS USED PREDOMINATELY FOR:
ELECTRONIC COMMERCE (RETAIL OR WHOLESALE PURPOSES OTHER THAN THE SALE OF
VIDEO OR INTERACTIVE GAMES), GAMBLING (INCLUDING ACTIVITIES REGULATED BY
A NEW YORK GAMING AGENCY), EXCLUSIVE LOCAL CONSUMPTION FOR ENTITIES NOT
ACCESSIBLE BY THE GENERAL PUBLIC INCLUDING INDUSTRIAL OR OTHER PRIVATE
PURPOSES, AND POLITICAL ADVOCACY PURPOSES.
(2) "DIGITAL GAMING MEDIA PRODUCTION COSTS" MEANS ANY COSTS FOR PROP-
ERTY USED AND WAGES OR SALARIES PAID TO INDIVIDUALS DIRECTLY EMPLOYED
FOR SERVICES PERFORMED BY THOSE INDIVIDUALS DIRECTLY AND PREDOMINATELY
IN THE CREATION OF A DIGITAL GAMING MEDIA PRODUCTION OR PRODUCTIONS.
DIGITAL GAMING MEDIA PRODUCTION COSTS INCLUDE BUT SHALL NOT BE LIMITED
TO TO PAYMENTS FOR PROPERTY USED AND SERVICES PERFORMED DIRECTLY AND
PREDOMINATELY IN THE DEVELOPMENT (INCLUDING CONCEPT CREATION), DESIGN,
PRODUCTION (INCLUDING CONCEPT CREATION), DESIGN, PRODUCTION (INCLUDING
TESTING), EDITING (INCLUDING ENCODING) AND COMPOSITING (INCLUDING THE
INTEGRATION OF DIGITAL FILES FOR INTERACTION BY END USERS) OF DIGITAL
GAMING MEDIA. DIGITAL GAMING MEDIA PRODUCTION COSTS SHALL NOT INCLUDE
EXPENSES INCURRED FOR THE DISTRIBUTION, MARKETING, PROMOTION, OR ADVER-
TISING CONTENT GENERATED BY END-USERS OR OTHER COSTS NOT DIRECTLY AND
PREDOMINATELY RELATED TO THE CREATION, PRODUCTION OR MODIFICATION OF
DIGITAL GAMING MEDIA. IN ADDITION, SALARIES OR OTHER INCOME DISTRIBUTION
RELATED TO THE CREATION OF DIGITAL GAMING MEDIA FOR ANY PERSON WHO
SERVES IN THE ROLE OF CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER,
PRESIDENT, TREASURER OR SIMILAR POSITION SHALL NOT BE INCLUDED AS
DIGITAL GAMING MEDIA PRODUCTION COSTS. FURTHERMORE, ANY INCOME OR OTHER
DISTRIBUTION TO ANY INDIVIDUAL WHO HOLDS AN OWNERSHIP INTEREST IN A
DIGITAL GAMING MEDIA PRODUCTION ENTITY SHALL NOT BE INCLUDED AS DIGITAL
GAMING MEDIA PRODUCTION COSTS.
(3) "QUALIFIED DIGITAL GAMING MEDIA PRODUCTION COSTS" MEANS DIGITAL
GAMING MEDIA PRODUCTION COSTS ONLY TO THE EXTENT SUCH COSTS ARE ATTRIB-
UTABLE TO THE USE OF PROPERTY OR THE PERFORMANCE OF SERVICES BY ANY
A. 2670--B 6
PERSONS WITHIN THE STATE DIRECTLY AND PREDOMINANTLY IN THE CREATION,
PRODUCTION OR MODIFICATION OF DIGITAL GAMING RELATED MEDIA. SUCH TOTAL
PRODUCTION COSTS INCURRED AND PAID IN THIS STATE SHALL BE EQUAL TO OR
EXCEED SEVENTY-FIVE PERCENT OF TOTAL COST OF AN ELIGIBLE PRODUCTION
INCURRED AND PAID WITHIN AND WITHOUT THIS STATE.
(D) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
(1) ARTICLE NINE-A: SECTION TWO HUNDRED TEN-B, SUBDIVISION FIFTY-FOUR.
(2) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (I), PARA-
GRAPH ONE, SUBPARAGRAPH (B), CLAUSE (XLV).
(3) ARTICLE TWENTY-TWO: SECTION SIX HUNDRED SIX, SUBSECTION (JJJ).
§ 6. Section 210-B of the tax law is amended by adding a new subdivi-
sion 54 to read as follows:
54. EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (A) ALLOWANCE
OF CREDIT. A TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-FIVE OF
THIS CHAPTER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN
SUCH SECTION FORTY-FIVE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
(B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE
AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE
YEAR REDUCES THE TAX TO SUCH AMOUNT, THE EXCESS SHALL BE TREATED AS AN
OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER, PROVIDED,
HOWEVER, NO INTEREST SHALL BE PAID THEREON.
§ 7. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new clause (xlv) to read as
follows:
(XLV) EMPIRE STATE DIGITAL AMOUNT OF CREDIT
GAMING MEDIA PRODUCTION UNDER SUBDIVISION
CREDIT UNDER SUBSECTION (JJJ) FIFTY-FOUR OF SECTION
TWO HUNDRED TEN-B
§ 8. Section 606 of the tax law is amended by adding a new subsection
(jjj) to read as follows:
(JJJ) EMPIRE STATE DIGITAL GAMING MEDIA PRODUCTION CREDIT. (1) ALLOW-
ANCE OF CREDIT. A TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION FORTY-
FIVE OF THIS CHAPTER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS
PROVIDED IN SUCH SECTION FORTY-FIVE AGAINST THE TAX IMPOSED BY THIS
ARTICLE.
(2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT-
ED OR REFUNDED AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS
ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
§ 9. The state commissioner of economic development, after consulting
with the state commissioner of taxation and finance, shall promulgate
regulations by December 31, 2017 to establish procedures for the allo-
cation of tax credits as required by subdivision (a) of section 44 and
subdivision (a) of section 45 of the tax law. Such rules and regulations
shall include provisions describing the application process, the due
dates for such applications, the standards which shall be used to evalu-
ate the applications, the documentation that will be provided to taxpay-
ers substantiate to the New York state department of taxation and
finance the amount of tax credits allocated to such taxpayers, under
A. 2670--B 7
what conditions all or a portion of this tax credit may be revoked, and
such other provisions as deemed necessary and appropriate. Notwithstand-
ing 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 December 31, 2017 deadline.
§ 10. Subdivision 13 of section 352 of the economic development law is
REPEALED.
§ 11. Subdivisions 1, 3 and 5 of section 353 of the economic develop-
ment law, subdivisions 1 and 3 as amended by section 2 of part K of
chapter 59 of the laws of 2017, subdivision 3 as separately amended by
section 2 of part ZZ of chapter 59 of the laws of 2017 and subdivision 5
as amended by section 2 of part K of chapter 59 of the laws of 2015, are
amended to read as follows:
1. To be a participant in the excelsior jobs program, a business enti-
ty shall operate in New York state predominantly:
(a) as a financial services data center or a financial services back
office operation;
(b) in manufacturing;
(c) in software development and new media;
(d) in scientific research and development;
(e) in agriculture;
(f) in the creation or expansion of back office operations in the
state;
(g) in a distribution center;
(h) in an industry with significant potential for private-sector
economic growth and development in this state as established by the
commissioner in regulations promulgated pursuant to this article. In
promulgating such regulations the commissioner shall include job and
investment criteria;
(i) as an entertainment company; OR
(j) [in music production; or
(k)] as a life sciences company.
3. For the purposes of this article, in order to participate in the
excelsior jobs program, a business entity operating predominantly in
manufacturing must create at least five net new jobs; a business entity
operating predominately in agriculture must create at least five net new
jobs; a business entity operating predominantly as a financial service
data center or financial services customer back office operation must
create at least twenty-five net new jobs; a business entity operating
predominantly in scientific research and development must create at
least five net new jobs; a business entity operating predominantly in
software development must create at least five net new jobs; a business
entity creating or expanding back office operations must create at least
twenty-five net new jobs; [a business entity operating predominately in
music production must create at least five net new jobs;] a business
entity operating predominantly as an entertainment company must create
or obtain at least one hundred net new jobs; or a business entity oper-
ating predominantly as a distribution center in the state must create at
least fifty net new jobs, notwithstanding subdivision five of this
section; or a business entity operating predominately as a life sciences
company must create at least five net new jobs; or a business entity
must be a regionally significant project as defined in this article; or
5. A not-for-profit business entity, a business entity whose primary
function is the provision of services including personal services, busi-
ness services, or the provision of utilities, and a business entity
engaged predominantly in the retail or entertainment industry, other
A. 2670--B 8
than a business operating as an entertainment company as defined in this
article [and other than a business entity engaged in music production],
and a company engaged in the generation or distribution of electricity,
the distribution of natural gas, or the production of steam associated
with the generation of electricity are not eligible to receive the tax
credit described in this article.
§ 12. Subdivision 23 of section 352 of the economic development law,
as amended by section 1 of part K of chapter 59 of the laws of 2017, is
amended to read as follows:
23. "Software development" means the creation of coded computer
instructions [or production or post-production of video games, as
defined in subdivision one-a of section six hundred eleven of the gener-
al business law, other than those embedded and used exclusively in
advertising, promotional websites or microsites,] and [also] includes
new media as defined by the commissioner in regulations.
§ 13. The economic development law is amended by adding a new section
243 to read as follows:
§ 243. REPORTS ON THE MUSIC AND DIGITAL GAMING INDUSTRIES IN NEW YORK.
1. THE EMPIRE STATE DEVELOPMENT CORPORATION SHALL FILE A REPORT ON A
BIANNUAL BASIS WITH THE DIRECTOR OF THE DIVISION OF THE BUDGET AND THE
CHAIRPERSONS OF THE ASSEMBLY WAYS AND MEANS COMMITTEE AND SENATE FINANCE
COMMITTEE. THE REPORT SHALL BE FILED NO LATER THAN THIRTY DAYS BEFORE
THE MID-POINT AND THE END OF THE STATE FISCAL YEAR. THE FIRST REPORT
SHALL COVER THE CALENDAR HALF YEAR THAT BEGINS ON JANUARY FIRST, TWO
THOUSAND NINETEEN. EACH REPORT MUST CONTAIN THE FOLLOWING INFORMATION
FOR THE COVERED CALENDAR HALF YEAR:
(A) THE TOTAL DOLLAR AMOUNT OF CREDITS ALLOCATED PURSUANT TO SECTIONS
FORTY-FOUR AND FORTY-FIVE OF THE TAX LAW DURING THE HALF YEAR, BROKEN
DOWN BY MONTH;
(B) THE NUMBER OF MUSIC AND DIGITAL GAMING PROJECTS, WHICH HAVE BEEN
ALLOCATED TAX CREDITS OF LESS THAN ONE MILLION DOLLARS PER PROJECT, AND
THE TOTAL DOLLAR AMOUNT OF CREDITS ALLOCATED TO THOSE PROJECTS DISTRIB-
UTED BY REGION PURSUANT TO SUBDIVISION (B) OF SECTIONS FORTY-FOUR AND
FORTY-FIVE OF THE TAX LAW;
(C) THE NUMBER OF MUSIC AND DIGITAL GAMING PROJECTS, WHICH HAVE BEEN
ALLOCATED TAX CREDITS OF MORE THAN ONE MILLION DOLLARS, AND THE TOTAL
DOLLAR AMOUNT OF CREDITS ALLOCATED TO THOSE PROJECTS DISTRIBUTED BY
REGION PURSUANT TO SUBDIVISION (B) OF SECTIONS FORTY-FOUR AND FORTY-FIVE
OF THE TAX LAW;
(D) A LIST OF EACH ELIGIBLE MUSIC AND DIGITAL GAMING PROJECT, WHICH
HAS BEEN ALLOCATED A TAX CREDIT ENUMERATED BY REGION PURSUANT TO SUBDI-
VISION (B) OF SECTIONS FORTY-FOUR AND FORTY-FIVE OF THE TAX LAW, AND FOR
EACH OF THOSE PROJECTS, (I) THE ESTIMATED NUMBER OF EMPLOYEES ASSOCIATED
WITH THE PROJECT, (II) THE ESTIMATED QUALIFYING COSTS FOR THE PROJECTS,
(III) THE ESTIMATED TOTAL COSTS OF THE PROJECT, (IV) THE CREDIT ELIGIBLE
EMPLOYEE HOURS FOR EACH PROJECT, AND (V) TOTAL WAGES FOR SUCH CREDIT
ELIGIBLE EMPLOYEE HOURS FOR EACH PROJECT; AND
(E) (I) 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,
THE STATE OF RESIDENCE OR INCORPORATION; 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 CLAIM-
A. 2670--B 9
ING THE TAX CREDIT, (II) 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
(III) INFORMATION IDENTIFYING THE PROJECT ASSOCIATED WITH EACH TAXPAYER
FOR WHICH A TAX CREDIT WAS CLAIMED UNDER SECTION FORTY-FOUR OR FORTY-
FIVE OF THE TAX LAW.
2. THE EMPIRE STATE DEVELOPMENT CORPORATION SHALL FILE A REPORT ON A
TRIENNIAL BASIS WITH THE DIRECTOR OF THE DIVISION OF THE BUDGET AND THE
CHAIRPERSONS OF THE ASSEMBLY WAYS AND MEANS COMMITTEE AND SENATE FINANCE
COMMITTEE. THE FIRST REPORT SHALL BE FILED NO LATER THAN MARCH FIRST,
TWO THOUSAND TWENTY-ONE. THE REPORT MUST BE PREPARED BY AN INDEPENDENT
THIRD PARTY AUDITOR AND INCLUDE: (A) INFORMATION REGARDING THE EMPIRE
STATE MUSIC PRODUCTION CREDIT AND THE EMPIRE STATE DIGITAL GAMING
PRODUCTION CREDIT PROGRAMS INCLUDING THE EFFICIENCY OF OPERATIONS, RELI-
ABILITY OF FINANCIAL REPORTING, COMPLIANCE WITH LAWS AND REGULATIONS AND
DISTRIBUTION OF ASSETS AND FUNDS; (B) AND ECONOMIC IMPACT STUDY PREPARED
BY AN INDEPENDENT THIRD PARTY OF THE PROGRAM WITH SPECIAL EMPHASIS ON
THE REGIONAL IMPACT BY REGION AND THE TOTAL DOLLAR AMOUNT OF CREDITS
ALLOCATED TO THOSE PROJECTS DISTRIBUTED BY REGION PURSUANT TO SUBDIVI-
SION (B) OF SECTIONS FORTY-FOUR AND FORTY-FIVE OF THE TAX LAW; AND (C)
ANY OTHER INFORMATION OR STATISTICAL INFORMATION THAT THE COMMISSIONER
OF ECONOMIC DEVELOPMENT DEEMS TO BE USEFUL IN ANALYZING THE EFFECTS OF
THE PROGRAMS.
§ 14. This act shall take effect immediately and shall apply to taxa-
ble years beginning on January 1, 2018 and before January 1, 2023;
provided that sections one through eight of this act shall expire and be
deemed repealed December 31, 2022.