Section 28. Empire state commercial production credit

(a) Allowance of
  credit.   (1) A taxpayer which  is  a  qualified  commercial  production
  company,  or  which  is  a  sole  proprietor  of  a qualified commercial
  production company, and which is subject to tax under article nine-A  or
  twenty-two  of this chapter, shall be allowed a credit against such tax,
  pursuant to  the  provisions  referenced  in  subdivision  (d)  of  this
  section,  to be computed as provided in this section. Provided, however,
  to be eligible for such credit, at least  seventy-five  percent  of  the
  production  costs  (excluding  post  production  costs) paid or incurred
  directly and predominantly in the actual filming  or  recording  of  the
  qualified commercial must be costs incurred in New York state.
    (2)  The state has annually seven million dollars in total tax credits
  to disburse to all eligible commercial production companies.  The  seven
  million  dollars  in  total  tax credits shall be allocated according to
  subparagraphs (i), (ii) and (iii) of this paragraph:
    (i) The state annually will disburse three million of the total  seven
  million  in  tax  credits  to  all eligible production companies and the
  amount of the credit shall be the product (or  pro  rata  share  of  the
  product,  in the case of a member of a partnership) of twenty percent of
  the qualified production costs paid or incurred in the production  of  a
  qualified  commercial, provided that the qualified production costs paid
  or incurred are attributable to the use  of  tangible  property  or  the
  performance  of  services  within  the  state  in the production of such
  qualified commercial. To be eligible for said credit the total qualified
  production costs of a qualified production company must  be  greater  in
  the  aggregate  during the current calendar year than the average of the
  three previous  years  for  which  the  credit  was  applied.  Provided,
  however,  that  until  a  qualified production company has established a
  three year history, the credit will be based on either the previous year
  or the average of the two previous years, whichever is greater.  If  the
  qualified  production  company  has never applied for the growth credit,
  the previous years data will be used to  create  a  benchmark.  The  tax
  credit  shall  be  applied  only  to  the  amount of the total qualified
  production costs of the current calendar year that are greater than  the
  total amount of production costs of the preceding calendar year. The tax
  credit  must  be  distributed  to eligible production companies on a pro
  rata basis, provided, however, that no such qualified production company
  shall receive more than three hundred thousand dollars annually for such
  credit. The credit shall be allowed for the taxable year  in  which  the
  production of such qualified commercial is completed.
    (ii) The state annually will disburse three million of the total seven
  million  in tax credits to all eligible production companies who film or
  record  qualified   commercials   within   the   metropolitan   commuter
  transportation  district  as defined in section twelve hundred sixty-two
  of the public authorities law. The amount of the  credit  shall  be  the
  product  (or pro rata share of the product, in the case of a member of a
  partnership) of five percent of the qualified production costs  paid  or
  incurred  in the production of a qualified commercial, provided that the
  qualified production costs paid or incurred are attributable to the  use
  of  tangible property or the performance of services within the state in
  the production of such qualified commercial. To  be  eligible  for  said
  credit  the  total  qualified production costs of a qualified production
  company must be greater  than  five  hundred  thousand  dollars  in  the
  aggregate  during  the  calendar  year.  Such  credit will be applied to
  qualified production costs exceeding five hundred thousand dollars in  a
  calendar year.
    (iii)  The state annually will disburse one million of the total seven
  million in tax credits to all eligible production companies who film  or

  record  a  qualified  commercial  outside  of  the metropolitan commuter
  transportation district as defined in section twelve  hundred  sixty-two
  of  the  public  authorities  law. The amount of the credit shall be the
  product  (or pro rata share of the product, in the case of a member of a
  partnership) of five percent of the qualified production costs  paid  or
  incurred  in the production of a qualified commercial, provided that the
  qualified production costs paid or incurred are attributable to the  use
  of  tangible property or the performance of services within the state in
  the production of such qualified commercial. To  be  eligible  for  said
  credit  the  total  qualified production costs of a qualified production
  company must be  greater  than  two  hundred  thousand  dollars  in  the
  aggregate  during  the  calendar  year.  Such  credit will be applied to
  qualified production costs exceeding two hundred thousand dollars  in  a
  calendar year.
    (3)  No  qualified  production  costs used by a taxpayer either as the
  basis for the allowance of the credit provided for under this section or
  used in the calculation of the credit provided for  under  this  section
  shall  be  used  by  such  taxpayer  to  claim  any other credit allowed
  pursuant to this chapter.
    Notwithstanding any provisions of this  section  to  the  contrary,  a
  corporation  or  partnership,  which  otherwise qualifies as a qualified
  commercial production company,  and  is  similar  in  operation  and  in
  ownership  to  a  business  entity  or  entities  taxable, or previously
  taxable, under section one hundred eighty-three, one hundred eighty-four
  or one hundred eighty-five of  article  nine;  article  nine-A,  article
  thirty-two  or  thirty-three  of  this  chapter or which would have been
  subject to tax under article  twenty-three  of  this  chapter  (as  such
  article  was in effect on January first, nineteen hundred eighty) or the
  income or losses of which is or was includable under article  twenty-two
  of  this  chapter  shall  not  be deemed a new or separate business, and
  therefore shall not be eligible for empire state  commercial  production
  benefits,  if  it  was  not formed for a valid business purpose, as such
  term is defined in clause (D) of subparagraph one of  paragraph  (o)  of
  subdivision  nine  of  section two hundred eight of this chapter and was
  formed  solely  to  gain  empire  state  commercial  production   credit
  benefits.
    (b)  Definitions.  As  used in this section, the following terms shall
  have the following meanings:
    (1) "Qualified production costs" means production costs  only  to  the
  extent  such  costs  are attributable to the use of tangible property or
  the performance of services within the state directly and  predominantly
  in  the  production  (including pre-production and post-production) of a
  qualified commercial.
    (2) "Production costs" means any costs for tangible property used  and
  services   performed   directly  and  predominantly  in  the  production
  (including  pre-production   and   post-production)   of   a   qualified
  commercial.  "Production costs" shall not include (i) costs for a story,
  script or scenario to be used for a qualified commercial and (ii)  wages
  or  salaries  or  other  compensation  for writers, directors, including
  music directors, producers and performers (other than background  actors
  with  no  scripted  lines  who  are  employed by a qualified company and
  musicians). "Production costs"  generally  include  technical  and  crew
  production   costs,  such  as  expenditures  for  commercial  production
  facilities and/or location costs, or any part thereof, film,  audiotape,
  videotape   or  digital  medium,  props,  makeup,  wardrobe,  commercial
  processing,  camera,  sound  recording,   scoring,   set   construction,
  lighting,  shooting,  editing  and  meals. For purposes of this section,
  "post production costs" include the production of original content for a

  qualified  commercial  employing  techniques   traditionally   used   in
  post-production  for  visual  effects,  graphic  design,  animation, and
  musical composition. Provided, however,  that  "post  production  costs"
  shall  not  include  the  editing  of  previously produced content for a
  qualified commercial.
    (3) "Qualified commercial" means an advertisement that is recorded  on
  film,   audiotape,   videotape   or  digital  medium  in  New  York  for
  multi-market distribution by way of radio, television  networks,  cable,
  satellite  or  motion picture theaters. "Qualified commercial" shall not
  include (i) news or current affairs program, interview or talk  program,
  network promos, i.e., commercials promoting television series or movies,
  "how-to"  (i.e.,  instructional)  commercial  or  program, commercial or
  program  consisting  entirely  of  stock  footage,  trailers   promoting
  theatrical  films,  sporting event or sporting program, game show, award
  ceremony, daytime drama  (i.e.,  daytime  "soap  opera"),  or  "reality"
  program,  or  (ii)  a  production  for  which records are required under
  section 2257 of title 18, United States  code,  to  be  maintained  with
  respect  to  any  performer  in  such  production  (reporting  of books,
  commercials, etc. with respect to sexually explicit conduct).
    (4)  "Qualified  commercial  production  company"  is  a  corporation,
  partnership, limited partnership, or other entity or individual which or
  who  is  principally engaged in the production of a qualified commercial
  and controls the production of the qualified commercial and is  not  the
  distributor or contracting entity for production of such commercial.
    (c)  Cross-references.  For  application of the credit provided for in
  this section, see the following provision of this chapter:
    (1) article 9-A: section 210: subdivision 38.
    (2) article 22: section 606: subsection (jj).
    * NB Repealed December 31, 2011
    * NB There are 2 § 28's