S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3457--A
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 27, 2025
                                ___________
 
 Introduced  by  M.  of A. McDONALD, SEAWRIGHT, LUNSFORD, STIRPE, TAYLOR,
   BRABENEC, SLATER,  BLUMENCRANZ,  BRONSON,  BICHOTTE HERMELYN,  DAVILA,
   SIMPSON,  WOERNER,  BERGER -- Multi-Sponsored by -- M. of A. LEVENBERG
   -- read once and referred to  the  Committee  on  Ways  and  Means  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 AN ACT to amend the tax law, in relation to extending the period  during
   which  the empire state digital gaming media production tax credit may
   be claimed, the eligibility criteria for such tax credit, and allowing
   unused allowable credits to be rolled over to the following tax year
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subdivision (a) and subdivisions (b) and (c)
 of  section 45 of the tax law, as added by section 1 of part OO of chap-
 ter 59 of the laws of 2022, are amended to read as follows:
   (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 for taxable  years  beginning  on  or  after  January
 first,  two thousand twenty-three and before January first, two thousand
 [twenty-eight] THIRTY-TWO.
   (b) Allocation of credit. The aggregate amount of tax credits  allowed
 under  this section, subdivision fifty-five of section two hundred ten-B
 and subsection (nnn) of section six hundred six of this chapter  in  any
 taxable  year  shall be five million dollars. Such credit shall be allo-
 cated by the department of economic development  in  order  of  priority
 based  upon  the date of filing an application for allocation of digital
 gaming media production credit with  such  office.  AN  APPLICANT  SHALL
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06207-06-5
              

 A. 3457--A                          2
 
 SUBMIT  AN  ANNUAL APPLICATION WHICH SHALL INCLUDE ALL QUALIFIED DIGITAL
 GAMING MEDIA PRODUCTIONS FOR THE TAXABLE YEAR ALONG WITH AN ESTIMATE  OF
 THE  DIGITAL  GAMING  MEDIA  PRODUCTION  COSTS.  THE  APPLICATION CAN BE
 SUBMITTED  NO  EARLIER  THAN  NINETY  DAYS PRIOR TO THE FIRST DAY OF THE
 APPLICABLE TAXABLE YEAR.  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.  PROVIDED, HOWEVER, THAT FOR TAXABLE YEARS BEGINNING ON OR
 AFTER JANUARY FIRST, TWO THOUSAND TWENTY-THREE, IF THE TOTAL  AMOUNT  OF
 ALLOCATED  CREDITS  APPLIED  FOR IN ANY PARTICULAR YEAR IS LESS THAN THE
 AGGREGATE AMOUNT OF  TAX  CREDITS  ALLOWED  FOR  SUCH  YEAR  UNDER  THIS
 SECTION,  ANY UNUSED PORTION MAY BE CARRIED OVER AND ADDED TO THE AGGRE-
 GATE AMOUNT OF CREDITS ALLOWED IN THE NEXT SUCCEEDING  TAXABLE  YEAR  OR
 YEARS.
   (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; and (iii) animation, simulation
 or embedded  graphics  digital  gaming  related  software  intended  for
 commercial  distribution  regardless  of medium; provided, however, that
 the qualified digital game development media  productions  described  in
 subparagraphs  (i)  through  (iii)  of  this paragraph must have digital
 media production costs equal to or in  excess  of  [one  hundred]  FIFTY
 thousand  dollars  per  production.  A  qualified  digital  gaming media
 production does not include a website, video, interactive game or  soft-
 ware  that  is  used  predominately  for: electronic commerce (retail or
 wholesale purposes other than the  sale  of  video  interactive  games),
 gambling  (including  activities regulated by a New York gaming agency),
 or political advocacy purposes.
   (2) "Digital gaming media production costs" means any costs for  wages
 [or  salaries]  paid  to  individuals,  [other  than actors or writers,]
 directly employed for services performed by those  individuals  directly
 [and predominantly] in the creation of a digital gaming media production
 or  productions.  [Up to one hundred thousand dollars in wages and sala-
 ries paid to such employees, other than  actors  and  writers,  directly
 employed  shall  be  used  in  the  calculation of this credit.] Digital
 gaming media production costs  include  but  shall  not  be  limited  to
 payments  for  services  performed  directly  [and predominantly] in the
 development (including concept creation), [design,] production  (includ-
 ing  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 advertising
 content generated by end users, other costs not directly  [and  predomi-
 nantly]  related  to the creation, production or modification of digital
 gaming media or costs used by the taxpayer as a basis of the calculation
 of any other tax credit allowed under this chapter. In addition,  [sala-
 ries  or  other  income  distribution]  WAGES related to the creation of
 digital gaming media for any person who PREDOMINATELY serves in A CORPO-
 A. 3457--A                          3
 
 RATE CAPACITY IN the role of chief executive  officer,  chief  financial
 officer,  president,  treasurer or similar CORPORATE position AND WHO IS
 NOT DIRECTLY ENGAGED IN SERVICES RELATED TO THE CREATION  OF  A  DIGITAL
 GAMING  MEDIA PRODUCTION OR PRODUCTIONS shall not be included as digital
 gaming media production costs if the  digital  gaming  media  production
 entity  has  more  then  ten employees. [Salaries or other income] WAGES
 PAID to a person serving in such a role for  the  digital  gaming  media
 production  entity shall also not be included if the person was employed
 by a related person of the digital gaming media production entity within
 sixty months of the date the  digital  gaming  media  production  entity
 applied  for  the tax credit certificate described in subdivision (d) of
 this section. For purposes of the preceding sentence, a  related  person
 shall have the same meaning as the term "related person" in section four
 hundred  sixty-five  of  the  internal  revenue  code. [Furthermore, any
 income or other distribution to any individual including, but not limit-
 ed to, licensing or royalty fees, who holds an ownership interest  in  a
 digital  gaming  media production entity, whether or not such individual
 is serving in the role of chief executive officer, chief financial offi-
 cer, president, treasurer or similar position for such an entity,  shall
 not  be  included  as  digital gaming media production costs. Up to four
 million dollars in qualified digital gaming media production  costs  per
 production  shall  be  used  in the calculation of this credit.] Digital
 gaming media 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.
   (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
 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.]
   (4)  "Digital  gaming  media  production  entity" means a corporation,
 partnership, limited partnership or other entity or  individual  engaged
 in qualified digital game development media production.
   §  2. Paragraph (a) of subdivision 55 of section 210-B of the tax law,
 as added by section 2 of part OO of chapter 59 of the laws of  2022,  is
 amended to read as follows:
   (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. [Under no circumstances may a single  taxpayer  receive
 more  than  one million five hundred thousand dollars in tax credits per
 year.]
   § 3. Paragraph 1 of subsection (nnn) of section 606 of the tax law, as
 added by section 4 of part OO of chapter 59 of  the  laws  of  2022,  is
 amended to read as follows:
   (1)  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. [Under no circumstances may a single  taxpayer  receive
 more  than  one million five hundred thousand dollars in tax credits per
 year.]
   § 4. This act shall take effect immediately and shall apply to taxable
 years beginning on and after January 1, 2025 and before January 1, 2032.