In recent months, new tax credits meant to attract more production to New York State and New York City were introduced. In the case of the state initiative, Gov. George E. Pataki signed off on a budget that includes millions of dollars in wage tax credits for film and television productions shot in the state. Dubbed the Empire State Film Production Tax Credit, the incentive calls for the State of New York to contribute a total of $100 million over the next four years–$25 million annually–in order to offer a 10 percent tax credit on below-the-line production costs.
Late last year, New York City introduced a credit to function in tandem with the state initiative. The city production tax incentive, which is tied to the state legislation, offers a five percent refundable tax credit to those filming in New York City, which will be funded by an annual $12.5 million allocation.
Projects shooting under the new state and city incentives could receive a 15 percent tax break for shooting here. Already, one project, the film version of The Producers, being directed by Mel Brooks, will take advantage of the credits. The film, from Universal Pictures, will be lensed at Steiner Studios in Brooklyn.
While the tax credits are most definitely a good thing for both the state and city, and will likely attract productions–and keep those already here–neither incentive applies to commercials. “Both the State and City film offices represented the interests of all entertainment sectors in the drafting of the bill for the film production tax credit. In at least one of the early drafts, commercials were included,” explains Katherine Oliver, commissioner of the New York City Mayor’s Office of Film, Theatre & Broadcasting. “It is important for legislators to hear from their constituents on such important matters, and the final legislation is a result of the strong lobbying efforts from various sectors of the entertainment community. Going forward, we will work to expand the program and explore new incentives for this key entertainment sector.”
Matt Miller, president/CEO of the Association of Independent Commercial Producers (AICP), notes that the exclusion of commercial production from the state legislation “was purely an economic factor. They weren’t sure how this thing was going to fly, and once legislation is written, and they’re trying to get it passed, it becomes a budget issue,” he said. “It becomes a negotiation between the people who are sponsoring, and the finance people. And it’s just becomes a matter of numbers. They weren’t exactly convinced of the importance of commercials, and they also weren’t really sure of what the cost of the overall bill would be.”
The AICP is working with a lobbying firm–Wilson, Elser, Moskowitz, Elder & Dicker (WEMED), and at press time, Miller and AICP executive VP Steve Caplan were scheduled to travel to Albany to meet with senators and assemblyman to lobby for inclusion of commercials in future tax credit legislation.
Stuart Match Suna, president of Silvercup Studios and Silvercup East, both in Long Island City, N.Y., who also serves as co-chair of the Runaway Production Task Forces of the Creative Coalition and the New York Production Alliance, relates that a research paper on the importance of commercials is in the works. The paper, done under the auspices of Cornell University’s Fiscal Policy Institute, located in Ithaca, N.Y., will be completed this year. “[The paper] is documenting the importance of this industry and the growth potentials and job growth and tax revenue,” notes Suna. “We are also continuing to lobby our elected officials, and show them how successful this program can be–it is going to create jobs–and also why by including commercials you’ll be able to increase job growth and tax revenue in the future.
TAX ISSUE
As earlier reported in SHOOT (9/17, p. 1), the state tax incentive package sprung from the aforementioned Steiner Studios, the recently opened studio complex located on the site of the Brooklyn Navy Yard. The facility is located in an Empire Zone: during the ’80s, 72 sites in New York State were deemed to have distressed employment based on census date. Declared Empire Zones, those areas were eligible for state tax credits and benefits, which hopefully spur development, and create new jobs.
With those tax credits set to expire last year, Steiner Studios reportedly lobbied state lawmakers to not only ensure the renewal of benefits available to Empire Zones, but also modify the rules to allow a 10 percent investment tax credit for films and television shows shot in those zones.
Other area studios, such as Silvercup Studios and Silvercup Studios East, as well as Kaufman-Astoria Studios, Astoria, N.Y., got wind of the idea, and along with other members of the production community, pushed to expand the tax breaks statewide. At the time the initial credits were introduced, Suna, as well as officials at Kaufman-Astoria, called for commercials to be part of the incentive legislation. An original version of the bill included spots, but that was ultimately dropped, due to cost considerations.
While Miller notes that there were a number of factors involved in why spots were not included in the legislation, he says legislators are aware of spotmakers concerns, and the hope is that the situation will be rectified.”