THE INCENTIVES PROGRAM - TIP

On December 18, 2019, Governor Cuomo signed into law Senate Bill 5864-a, thereby amending the Empire State film production credit to allow television writers’ and directors’ fees and salaries as eligible costs, subject to the following provisions:

• Allows for a refundable tax credit equal to 30% of qualified television writers’ and directors’ fees and salaries incurred in the production of a qualified television project, provided that:
  • The qualifying writer or director is a minority group member, as defined, or a woman;
  • Fees and salaries paid to any writer or director who is a profit participant in the qualified film are not eligible;
• Limits the amount of credit that may be earned on qualified television writers’ and directors’ fees and salaries who receives on-air credit to:
  • $50,000 for any one specific writer or director for the production of a single television pilot or a single episode of a television series; and,
  • $150,000 for the employment of any one specific writer or director;
• Limits the qualifying fees and salaries for a non-credited writer to $75,000 per series of episodes;
• Stipulates the credit shall be allowed for the taxable year in which the production of such qualified film is completed; and,
• Limits the aggregate amount of credits related to writers’ and directors’ fees and salaries to $5 million per calendar year.

The Act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2020.

House Bill 1767 proposes to establish a film production incentive program as follows:

• Creates a transferable tax credit equal to:
  • 20% of qualified instate spend and resident labor
    • Qualified resident labor does not include any amounts paid to an individual earning in excess of $250,000;
  • 10% of qualified nonresident labor
    • Qualified nonresident labor does not include any amounts paid to an individual earning in excess of $250,000; and,
  • An additional 5% on qualified spend and labor if 50% or more of principal photography days are shot in Missouri;
• Requires a minimum in-state expenditure budget of more than $50,000 or $100,000 for projects with a runtime of less than 30 minutes or more than 30 minutes, respectively;
• Requires an approved end credit statement and logo;
• Creates an annual funding cap of $4.5 million per calendar year; and
• Establishes a sunset date of December 31, 2026.

If enacted, the Act shall take effect for tax years beginning on or after January 1, 2021.

House Bill 139 proposes to create Virginia’s New Media and Technology Innovation Tax Credit which provides for incentives for commercials, digital interactive media, and episodic television series. Details are as follows:

• Creates a transferable tax credit equal to 15% of qualified spend and the first $1 million of each resident’s and nonresident’s salary and wage, or 20% if the eligible project is produced in an economically distressed area;
  • An incentive equal to an additional 10% of the total aggregate payroll for Virginia residents may be earned when total production costs in Virginia are at least $250,000 but no more than $1 million, or 20% if total production costs in Virginia exceed $1 million; and,
  • Allows for an additional 10%, for a possible maximum incentive rate of 50%, on the total aggregate payroll earned by Virginia residents employed for the first time as actors or crew members;
• Imposes a fee equal to 2% of the value of the qualifying expenses associated with the transferred credits;
• Allows the Governor’s Motion Picture Opportunity Fund to buy back tax credits provided the purchase price is at least 80% of the dollar value of the tax credit; and,
• Requires an audit from an independent certified public accountant.