As the leaders in the recording industry work together to find solutions, some of our local and state lawmakers have drafted legislation aimed at attracting companies to do their postproduction work in New York by offering tax credits.
In 2007, Assemblyman Joe Morelle introduced A06673, known as the Empire State Film Postproduction Tax Credit. It proposed giving a 10 percent tax credit to qualifying postproduction companies.
Additionally, New York City Councilmember David Yassky is working on a city version that would grant an additional 5 percent in tax credits.
Since the introduction of the Morelle bill, Assemblyman Steve Englebright took over as chair of the Tourism, Arts and Sports Development Committee and has authored a new postproduction bill. Currently this one has 35 sponsors and its companion bill in the Senate has 13. The Empire State Film Postproduction Tax Credit enjoys bipartisan support and could very well become law next year.
If the Englebright bill and the Yassky initiative become law, New York City will be able to offer a 15 percent tax credit for postproduction work. But will these measures go far enough to restore lost postproduction work to New York?
Nearly every state in the country offers some type of tax incentive plan for this industry. However, a 15 percent tax credit is half of what Connecticut offers. Massachusetts recently passed a law granting a 25 percent tax credit. However, many Massachusetts lawmakers want to double that figure and offer a 50 percent rebate for each dollar spent. Michigan currently offers a 42 percent rebate.
There are conflicting opinions on why the New York legislature didn’t include postproduction work in the original production film tax credit bill in 2004.
One aide I spoke with said the legislature understood the value of including postproduction work in the 2004 bill, but they weren’t able because of budgetary limitations.
One lawmaker told me that some didn’t know the difference between production and postproduction and would have included the latter had they better information.
A lobbyist close to this issue told me that some production studios without postproduction capabilities didn’t want postproduction as part of the tax credit plan due to the first come, first served nature of the program. In other words, if a slew of postproduction work came to New York and used up a large portion of the rebate money allotted by the state, these production studios would lose clients (who would otherwise be eligible for the tax credits), thus negatively impacting their bottom line.
One thing is certain: the scoring industry is hemorrhaging. Lawmakers will need to study the successful programs enacted in other states and act accordingly to remain competitive.