New York nixes live theater tax

4% ticket charge dropped from consideration

NEW YORK — Legiters can breathe a sigh of relief now that New York state leaders have announced that $1.3 billion in proposed tax increases will be dropped from consideration — including a potential levy on live theater.

The 4% state tax on legit tickets, which would have come bundled with an additional 4% levy from the city (plus another fractional percentage for the Metropolitan Transportation Authority), was just one of several increases originally proposed for the state’s 2009-10 executive budget.

Also taken off the table were potential taxes on downloadable content, non-diet soda, cable and satellite TV and radio services and “personal services” such as manicures, pedicures and haircuts, among other goods and services.

Gov. David A. Paterson, who announced the elimination of the proposals with state Senate Majority Leader Malcolm Smith and Assembly Speaker Sheldon Silver, said the taxes were dropped from consideration once enhanced federal funding became available. Move will be financed in part through the American Reinvestment and Recovery Act, expected to contribute $6.5 billion in tax relief to New York.

The state of New York is facing a $14.2 billion budget deficit in the coming fiscal year, and Paterson’s revised budget still includes about $2.8 billion in tax and fee hikes.

The decision to nix the theater tax came after a delegation of legiters traveled to Albany last month to argue against the proposed measure.

“We are grateful that the government recognized our concerns and took decisive action to eliminate additional financial burdens on theater patrons,” said Charlotte St. Martin, exec director of the Broadway League, the trade association of legit producers and presenters.

The tax had raised concerns in the legit industry that the additional charges would serve to further dissuade consumers from buying theater tickets, prices of which are already consistently on the rise. The tax on the top ticket price for a Broadway musical — now $135 — would have surpassed $10.

The governor’s announcement did not include an update on the status of the state’s tax incentive for film and TV production, which remains a sensitive issue now that shows like “Fringe” have left Gotham and a lot of films are largely looking elsewhere to shoot.

Three busloads of Gotham film and TV pros rode up to Albany on Wednesday to protest outside the Capitol.

(Dade Hayes contributed to this report.)

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