In the closing hours of the legislative session in Albany, the Assembly and Senate passed the Empire State Music Production Tax Credit (A10083A/S7485A), marking a major step forward in Local 802’s efforts to drive New York’s recording industry by providing needed support for music studios and creating good jobs for our world-class musicians.
The credit will provide a 25 percent tax credit for eligible production-related costs for downstate music businesses and a 35 percent tax credit for upstate music businesses, similar to the state’s film tax credit. Alongside our partners in the NYisMusic coalition, we lobbied, called, strategized and pushed with our partners for months to ensure that the salaries and fees paid to musicians on a recording project were part of the eligible costs.
This was vitally important to us. Too many small scale productions would be ineligible if the fees paid to musicians weren’t included, and this would have been unacceptable. After many phone calls, meetings, Amtrak train rides and press events, we were together able to ensure that this credit would support studio operators and music production companies of all sizes and in every city, helping to lighten the financial burden that countless music production companies face. Studio operators will now have even more incentive to create more projects, hire more musicians and create more music for all to enjoy.
This summer, we sat down with one of the bill’s sponsors, Assemblyman Joseph Lentol, who represents Greenpoint and part of the surrounding area in Brooklyn.
Local 802 Political Director Christopher Carroll: How do you feel the legislative session went?
Assemblyman Joseph Lentol: I was happy we were able to get a lot of things done, like passing the music tax credit.
Christopher Carroll: How did you get interested in the music industry and the tax credit?
Assemblyman Joseph Lentol: I became involved in the film tax credit discussion in 2004 when big entrepreneurs were looking to come into the neighborhood to make films. At the time, we were losing out to other places across the country due to the cost of creating projects here in NYC. At that time we had just a few companies, just beginning, but they didn’t know if it was going to be worthwhile. Today, we have all sorts of companies and shows right here in Greenpoint. The industry is booming. They are building extra stages, and it is all because of the film tax credit.
Though other people in government might not see it, I recognized that we lose music studios right here in Greenpoint. Because of cost, because of rent, they go elsewhere.
The music industry in NYC is home to all of these music venues – Carnegie Hall, Broadway, Lincoln Center, the ballets, not to mention the countless other venues across the city – producing music in one way, shape or form. A couple of people from the industry came to me and said that the industry needs something similar to what we do with the film tax credit. So we sat down, had meetings throughout 2013 and 2014, and formed a group called NY is Music with William Harvey and Justin Kalifowitz. I told them that this is going to be hard to get done. Never in my wildest dreams did I think that in the second year in trying we would get it passed! Usually it takes a lot longer. Especially without clout or state government buy-in beforehand.
Christopher Carroll: So you used the Post Production Tax Credit as a framework or model for the Music Production Tax Credit
Assemblyman Joseph Lentol: Yes, as a model.
Christopher Carroll: Obviously, film has exploded in NYC, largely as a result of the credit, making NYC a center point for the industry again. So the hope is the tax credit will help the small studios reestablish the music industry in the same way?
Assemblyman Joseph Lentol: Yes. Just as the film credit made NYC “Hollywood East,” the idea with the Music Production Tax Credit is that it will help the recording studios, especially the small ones, hire more people and create more jobs for people who work on productions. This is going to be helping the working folks. This is, in the end, a jobs bill.
Christopher Carroll: Did you experience a lack of understanding among people in Albany that this isn’t about helping stars and celebrities in the industry, but it is about creating jobs for more people?
Assemblyman Joseph Lentol: Yes. Like in the film industry. In that industry, I have people coming up to me saying that the expansion of the industry, thanks in large part to the tax credit, has meant that I can get work here in NY, rather than travel all over the country. We want the same thing to happen here with the music production tax credit.And if that happens, it’s great for our economy.
Christopher Carroll: There is a three-year sunset built into the bill. Do you see this getting renewed in three years?
Assemblyman Joseph Lentol: Yes, because I think it will take off. And that’s what happened with the film tax credit as well.
Christopher Carroll: Following this, do you see yourself getting involved in other aspects of the music and entertainment industry as well?
Assemblyman Joseph Lentol: I don’t know. I never expected to do this in the first place, but learned that there was a definite need for it. Who doesn’t like music? But New York is music and New York should be the capital of the music world.
Christopher Carroll: What is it going to take to get the bill finalized and signed by the governor?
Assemblyman Joseph Lentol: I think we need to show him how important and popular this bill is. Music is an important part of everyone’s life, and the governor will see how needed it is.
Christopher Carroll: The film tax credit is a good model, but there are still holes. While the film industry has been bolstered by the credit and new productions are being shot here, those same productions aren’t being scored by NY musicians. That is going to be a major focus for us here, because we have some of the best musicians in the world that aren’t being utilized and cultivated in the film industry. I hope that moving forward we can see legislation that ensures that musicians benefit from the other great work the state is doing. Last question: do you have a music background?
Assemblyman Joseph Lentol: Not really. I tried playing the guitar. But I have musical inclination…I can carry a tune and I like to sing. And of course, Italian music and rock-and-roll will always have a special place in my heart.
Christopher Carroll: On behalf of musicians across New York City and New York State, thank you for your time and effort to support the industry. Now let’s get the bill signed by the governor!
EMPIRE STATE MUSIC PRODUCTION TAX CREDIT
- SPONSORS: State Assemblyman Joseph Lentol, State Senator Martin Golden
- PROGRAM ADMINISTERED BY: Empire State Development
HOW PRODUCERS AND MUSICIANS WILL BENEFIT
- 25 percent tax credit for eligible production-related costs for downstate music businesses
- 35 percent tax credit for production-related costs for upstate music businesses, similar to the state’s film tax credit
- Eligible costs must be equal to or in excess of $7,500 (or $3,500 if outside of the five boroughs or Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess or Westchester counties).
- Costs must be related to job creation, including: studio rental fees; instrument and equipment rental fees; production session fees for musicians, programmers, engineers, and technicians; mixing and mastering services; local transportation; or expenditures directly related to music production and provided at or to the site for the production of music videos.
- Program cap: $25 million per year