Paterson Expands Breaks On Taxes for Film Companies
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Governor Paterson signed legislation yesterday expanding the state’s film production tax credit program that will increase tax breaks to film and television companies by more than $50 million dollars over the next five years.
The new legislation is devised to counter the migration of film and television production jobs from New York to neighboring states — specifically Connecticut, which over the past few years has enacted legislation to attract those jobs. The state claims that the New York economy has lost as much as $750 million in the last three years.
The tax break increases the percentage of qualified film production costs that can be applied for the credit to 30% from 10%. It also extends the program, which was originally set to expire in 2011, for an additional two years and increases the available pool of funds to $75 million in 2009, $85 million in 2010, $90 million in 2011 and 2012, and $110 million in 2013. It was $65 million in 2008.
The credits apply to “below the line” costs, which exclude the salaries of producers, directors, writers, and actors.
“The entertainment industry plays an important role in fostering economic growth by promoting our state on movie and television screens across the world, and creating thousands of jobs for New Yorkers,” Mr. Paterson said in a statement after announcing the legislation yesterday at an event marking the opening day of the Tribeca Film Festival.
But some are skeptical about the ultimate benefits provided by the tax breaks because of the transitory nature of many below-the-line production jobs. Opponents argue that less of an economic ripple effect is generated because the workers are not permanently contributing to state tax coffers.
The executive director of Good Jobs First, Greg LeRoy, says the credits are tantamount to a “cash gift” by the state.
“This looks like the latest chapter in the unholy alliance between Hollywood and politicians. The value of the credit clearly exceeds the highest possible tax liability that the studios would incur,” Mr. LeRoy said.
New York has seen a decrease of film production in recent years. The number of film permits issued in 2007 was 28,594, down from 34,718 in 2006 and 31,570 in 2005, according to statistics on the Web site of the Mayor’s Office of Film, Theatre and Broadcasting.
