Phillip Paquette
June 4, 2022

Quick Guide: New York State Commercial Tax Credit Program

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Shooting a commercial in New York? Stretch your dollar further and look into the New York State Commercial Tax Credit program.

In this brief guide, we’re breaking down what expenditures qualify and how to apply.

But first…some basics.

What is the New York State Commercial Tax Credit Program?

New York’s Commercial Tax Credit Program is a tax incentive offering from the Empire State Development. The goal aims to increase the overall number of commercial productions in New York. 

The New York Commercial Tax Credit program allocates up to $7 million per year in credits for commercial productions throughout the state. However, the amount commercials can qualify for depends on where the projects occur.

Upstate vs. downstate credits

The New York Commercial Tax Credit program divides the state into two qualifying regions—upstate and downstate credits. 

Let’s start with downstate.

$4 million goes towards projects filmed in the Metropolitan Commuter Transportation District (MCTD). The MCTD consists of New York City, Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties.

To qualify for the downstate credit:

  • $500,000 or more in qualified costs must go towards a commercial in the MCTD during a calendar year.
  • The amount of credit initially determined is 20% of qualified production costs over the $500,000 threshold. In other words, credit can be applied only to qualified production costs beyond the $500,000 threshold in the calendar year.
  • You receive credits based on your proportion of the funding for a project (pro-rata) with the downstate credit.

The upstate area of New York covers all other parts of New York beyond New York City and the rest of the MCTD. 

Compared to the downstate credit, the upstate credit:

  • Requires more than $100,000 in total qualified costs around the production of qualified commercials outside the MCTD during a calendar year. 
  • To incentivize filming upstate, the initial amount of credit is 30% of all qualified production costs. 
  • Like the downstate credit, the commercial tax program distributes credits based on your proportion of the funding for commercial projects. 

What if you shoot update and downstate?

You may have projects with expenses that originated in both regions. This program takes into account expenses incurred based on the region — so yes, you may apply for both the upstate and downstate programs. 

Who qualifies for New York commercial tax credits?

Eligibility for this tax credit program is open to any advertisement recorded on film, audiotape, videotape, or digital medium in New York. The ad must have multi-market distribution via radio, television, motion picture theaters, or streaming online.

A qualified commercial can include a package of two or more commercials, which are bid and produced under a single agency/client contract that defines a specified number of deliverables produced together.

The following projects are explicitly not eligible for commercial tax credits:

  • Trailers promoting theatrical films
  • Network promos
  • Stock footage
  • "How-to" (instructional) productions
  • News or current affairs programs
  • Interview or talk programs
  • Sporting events
  • Game shows
  • Award ceremonies
  • Daytime dramas
  • Reality programs
  • Music videos

What expenditures qualify for the New York commercial tax credit? 

Property or service expenses rendered in New York during the production (covers pre-production) of a commercial are costs that can qualify. Fair-game expenditures cover below-the-line expenses such as:

  • Technical and crew production
  • Facilities
  • Props
  • Makeup
  • Wardrobe
  • Set construction
  • Extras

Most post-production expenses qualify if the company applying, controls the post-production, and directly pays post-production vendors.

Their program excludes

  • Script and story costs
  • Wages for writers, directors, producers, and performers
  • Editing produced content from a previous project

How to apply for New York’s commercial tax credits? 

To apply, visit their application instructions page to download and complete these forms:

Form A 

This includes company information, whether you intend to apply for downstate and/or upstate credits, and your production details.

Form B 

This covers your schedule of qualified expenditures as a spreadsheet.

Form C 

Form C shows your qualified costs for each commercial or package of commercials. Be sure to attach Part 1 and Part 2 from the template provided by the Empire State Department.

With Form C you'll also need to attach:

  • An agency or client contract covering each commercial or package of commercials.
  • A Job Cost Report for each commercial or package of commercials (the "Actuals to Date" column should equal the total costs reported on Form C).
  • A General Ledger which details actual costs (with Qualified Costs clearly indicated) for the Job Cost Report submitted with Form C. 
  • Production reports for every camera-roll day, including report-to location information for cast and crew.

Form D 

Here you’ll need to attach a spreadsheet showing your annual total qualified costs broken down by upstate and downstate costs.

Form E  

This form is an employment report for each commercial or set of commercials based on the projects you define in Form C. Be sure to follow the application instructions page as this report must contain all information (name, hours, and wages) for all compensated individuals, including Qualified, Non-Qualified, above-the-line, contract (e.g. DGA), below-the-line, cast, crew, producers, loan-outs, and independent contractors.

Form F

This is a basic table showing the annual employment totals based on the bottom row totals of Form E.

You can email the above forms to Empire State Development (filmcredits@esd.ny.gov). 

The department issues a certificate of tax credit(s) if they approve your application. A copy of the certificate also goes to New York's Department of Taxation and Finance. 

If they reject your application, the department provides a notice of disapproval with the reason(s) for the denial included.

You're required to keep records for 3 years

Keep in mind New York’s Empire State Department requires all applicants to maintain records, in paper or electronic form, of any qualified productions costs you use to calculate your benefits under this program for a minimum of three years from the date you claim the tax credit on a New York State tax return. 

The department retains the right to request records. So make sure you keep them in a safe spot! If you use Wrapbook, you’re already securely storing your tax documents, call sheets, NDA’s, crew deal memos, all within the portal.

For safekeeping, add these important documents too. Keep your payroll, budgeting, and tax info in one place, to save headaches later.

Regardless of how and where you store your tax credit info, do so in a secure, organized way. You will need them again come tax season. Let us know how we can help. 

Wrapping Up

For any further information, visit the state’s site.

If you’re shooting in New York City for the first time, be sure to also check out our guide to NYC film permits

Disclaimer

At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice.  You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.

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About the Author

Phillip Paquette

Phillip Paquette is an Austin, TX-based storyteller and content strategist that's worked both on behalf of agencies and directly with brands. Catch his business musings on Medium.

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