Thursday, January 21, 2010

NYS Budget Proposal Extends Film Tax Credit

By Miriam Kreinin Souccar

The item still needs approval from the State Senate and Assembly, but film executives are confident the rebate program will pass.

The New York film community is breathing a sigh of relief today.

In the 2010 budget proposal released by Gov. Paterson Tuesday, he expanded the film tax credit to $420 million a year from $350 million and extended the program through 2014. The move comes after months of intense lobbying from the film production industry, which has seen business skyrocket since the tax credits were introduced in 2004.

“It’s validation for the work all of us have done to make this program the success that it is,” said Hal Rosenbluth, president of Kaufman Astoria Studios, which is opening a 40,000-square-foot sound stage and support facility next month, the studio’s seventh stage. “The governor is seeing that the program makes money and creates jobs.”

Of course it’s not a done deal yet. The budget now goes through a negotiation process with the Senate and Assembly, but film executives are confident that the tax rebate program will pass, though it may be tweaked a little.

The new program comes with a number of changes. In order to qualify for the 30% credit, producers have to conduct at least ten percent of shooting days at a qualified facility; provide a notice at the end of a film or television show acknowledging financial support from New York state; and purchase property and services from registered sales tax vendors. In an effort to boost the state’s post-production industry, at least 75% of all post-production work needs to be done in New York.

Perhaps most important to production executives is the five year commitment from the state. That longevity gives TV producers the security they need to film their series here. The industry remembers all too well what happened a year ago when Fringe, a show on Fox, packed up its sets and moved to Vancouver because of uncertainty with New York’s tax credits.

At that time, the state’s 30% tax break was so successful that the $685 million allocated to fund it ran out in less than 10 months. The state ended up allocating an additional $350 million for one more year, while it grappled with the recession. Not knowing if the funding would continue after that year was too much uncertainty for a number of TV producers.

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