New York Gov. Kathy Hochul has proposed a major increase in the state’s film and TV tax incentive, as the state looks to compete with California and Georgia to attract productions.
In her executive budget, Hochul proposed increasing the state’s film credit from $420 million to $700 million a year. The credit would also become more generous to each production, raising the rebate from 25% to 30%.
“Governor Hochul is focused on growing industries and opportunities across the state and the film and television industry is no different,” the governor’s office said in a statement. “The proposed enhancement of the film tax credit will grow the film industry and keep New York competitive in this very important sector of our economy which has generated over $20 billion in spending and created 57,300 direct and indirect jobs in the Empire State.”
Georgia has the nation’s largest production incentive, which topped $1.3 billion last year. New York and California each offered $420 million annually for the last two years.
California’s incentive is focused largely on attracting TV series to relocate from other states, offering a 25% incentive to relocating shows instead of the 20% credit offered to recurring shows.
Hochul’s proposal seeks to fight back by offering the state’s own 5% additional credit for relocating shows for two years. Shows would have to spend at least $1 million per episode, and have produced at least six episodes in another state, to qualify for the extra 5%.
The governor is also proposing to make above-the-line costs eligible for a credit, as well as to speed the payment of credits once productions are completed.
The proposal would allow above-the-line salaries to qualify up to $500,000 per individual. Above-the-line tax credits would also be capped at $15 million per production.
The governor would also extend the credit for five years, out to 2034.
New York is particularly focused on competition from neighboring New Jersey, which offers a higher rebate percentage, ranging from 30% to 39%. New Jersey offers a $100 million program, plus another $200 million for “studio partners” and “film lease partners.”
Hochul’s predecessor, Andrew Cuomo, reduced the state’s credit percentage from 30% to 25% in 2020.
The New York State Legislature will consider Hochul’s proposal, and is due to approve a budget by April 1.
California Gov. Gavin Newsom has recently proposed making his state’s credit refundable, meaning that productions can claim the credit even if they have little or no tax liability in the state. New York’s credit is already refundable.
Newsom’s proposal would extend the California credit to 2030. A two-year increase in the credit to $420 million would not be extended however, leaving the annual cap at $330 million.
Georgia’s credit is uncapped, and has risen dramatically in the last five years. The state offers a 30% rebate on production costs, both for above-the-line and below-the-line costs. The Georgia credit is not refundable, but it is transferable, meaning that studios typically sell their credits to in-state taxpayers at a modest discount.