Gotham is looking to shave a percentage point off of its contribution to New York state’s film and TV tax credit program.
In the midst of a crippling city budget crisis, the Mayor’s Office of Film, Theater and Broadcasting is backing legislation that would reduce the city’s tax credit rebate offer from 5% to 4% for productions that shoot in Gotham. The legislation about to be introduced in the state legislature would tighten up New York City’s tax credit program in other ways, but it would also allocate $24 million in rebate coin to renew the city’s program through 2011.
To lure film and TV productions to Gotham, the city since 2005 has offered a 5% rebate on taxes paid in connection with below-the-line expenses on film and TV productions. The city’s credit comes on top of the 30% rebate offered by the state for productions that shoot anywhere in New York.
Now, proposed legislation would cut the city’s tax credit from 5% to 4% and establish a $250,000 cap on refunds for each qualified production — or $300,000 if 75% of post-production work is also done in Gotham. The cap would apply per feature film or per episode of a TV series, meaning that the city would be far more generous to TV skeins that generate more revenue overall in state taxes and spending in local businesses than one-off features.
But the legislation would also gradually phase out the rebate entirely for productions that have benefited from it for more than five years.
And it would also implement a hard annual cap on the total rebates distributed, meaning that officials couldn’t dip into next year’s allocation if 2009 turns out to be a boom year for production.
On the state level, having that flexibility resulted in a brief funding drought earlier this year when the state program ran through an allocation that was meant to last five years in less than one year (Daily Variety, Feb. 20).