New York State Film Tax Incentive Renewed But Trimmed; Many Lower-Budget NYC Independent Films No Longer Eligible
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Haley Bennett in Swallow

New York State film tax credit has been reduced from 30% to 25% and qualification requirements have been tightened by last week's budget legislation signed by Governor Andrew Cuomo. Alarming for filmmakers who shoot low budget in New York, new rules make six-figure images not at all suitable for a tax credit in New York. Projects that spend most of their days in the five boroughs of New York City, Westchester, Rockland, Nassau, or Suffolk are subject to a new minimum spending requirement of $ 1 million, and projects that spend most of their days in one of the two boroughs for other districts in New York have a minimum spending limit of $ 250,000. (In particular, the minimum spending requirement does not apply to TV pilots.)

Despite the reduction in credit and stricter licensing requirements, the actual tax credit allocation of $ 420 million per year remains the same as this year – good news for filmmakers given the $ 177 billion in revenue losses caused by corona viruses. Dollar. The new budget also extends the expiration date of the film tax incentive program by one year until 2025.

While the New York film community can breathe a sigh of relief that spares cuts have spared the program's overall allocation despite opposition, producers who have made low-budget films in the city are deciphering the impact of new spending requirements on commercially riskier productions through emerging talent. Studio films and television will remain largely unaffected by the eligibility changes, even if the new minimum spending requirement of $ 1 million effectively means that films made in NYC with a total budget of less than about $ 1.3 million are excluded depending on sales and others Costs are no longer eligible for tax breaks in New York. And the minimum spending between films that are made in and around New York City and films that are made in the hinterland means that the production of city stories based on the dynamism of the streets of New York City is comparatively more expensive.

Independent producer Shrihari Sathe, who received the Spirit Award, says: “This will fundamentally change the low-budget landscape of independent filmmaking in New York City. Some of the first features I have created in the past 10 years would not have been possible under the latest minimum spending requirements. These new admission requirements adversely affect aspiring filmmakers. As fewer and fewer low-budget indies are filmed in the New York City metropolitan area, this also affects the crew at the start of their careers. "

Producer Kishori Rajan (Random Acts of Flyness) confirms Sathes concern about the impact of the rules on emerging filmmakers in New York City. "(These new rules) would have made so many functions with which I started my career impossible," she says. "In my career, I've worked on about seven features shot in New York State and used the 30% loan to get all the funding." I think that reducing our ability to create lower budget functions in NYS means fewer opportunities for new talent in New York to enter the industry. "

"I'm disappointed with the change in the law," agrees producer Alexandra Byer, whose most recent film, Tim Sutton's Berlin premiere Funny Face, is a Gotham-specific story filmed in the five boroughs of Manhattan. “I had already questioned the ability to make real independent films in New York City, and this seems to answer things. Without the tax credit incentive, lower budget films need to be shot elsewhere, in states and cities that can really support them. I always found New York the creative center and the energy behind the indie cinema – that's one of the reasons why I live and work here. But losing that incentive makes me think we're going in a different direction. And getting this message now seems to kick us even when we're down. "

Productive producer Mike S. Ryan (Free in Deed, The Missing Girl), who wrote in the filmmaker's current print edition about microbudget production, says he looks at the changes in light of pre-pandemic production density in New York City. "It's a practical answer to reality that the city is underutilized," he says. "There isn't enough crew to produce all of these televisions, and not enough locations that can handle the constant flow of corporate production." But Ryan ultimately comes to the same conclusion as the other producers interviewed here: “This seals that New York is no longer a city that supports nervous alternative cultural media. Do you understand the news, young artists? Other cities are waiting for you. "

Producer Mynette Louie has two films on the market that have benefited from the New York credits: Carlo Mirabella-Davis & # 39; Swallow, which is currently released by IFC Films, and Heidi Ewing's upcoming release of Sony Pictures Classics, I Carry You With Me. "I think that excluding smaller productions from tax credit subsidies could make some bolder, riskier films (which generally have a smaller budget) more difficult to finance," she agrees. “It could also mean that lower-budget films directed by working-class filmmakers with limited connections to rich people are more likely to have a tough fight. Both of these results would be truly unfortunate, as the world may need this type of film most to digest, heal, and progress in a post-pandemic world. "

But Louie also says that she is not surprised that the loan formula is being changed. “This pandemic requires cuts across all sectors, and I think tax credits should come before education and social services, like the ones that De Blasio has unfortunately cut. As much as I believe that governments, as members of a larger society, should support the creative industries and promote jobs and local spending, we all need to rethink our priorities as limited resources will be reallocated in the coming months. From a practical point of view, the tax cuts mean that equity financiers and distributors need to be strengthened to fill the gaps. And I don't understand why they shouldn't, especially if governments continue to refuse to increase taxes on businesses and the rich. "

If financiers and distributors, as Louie suggests, now need more support to fill the budget gaps caused by the new credit rules, Rajan hopes that they will remember to support the new voices, usually from the six-figure low-budget world have emerged. "As an industry, we have to be more vigilant than ever before that we create space and look for talent from all corners, and don't get lazy to promote new voices in the film room," she says. "New York City is still one of my favorite places to film in the world, and I want to continue working with established and new artists of all kinds here."

The 5% cut that affects Empire State film production and post-production credits applies to applications received after April 1.

The new rules, which are listed in bill 9509 and bill 7509 of the Senate, are summarized in the newsletter of the payroll company Cast and Crew along with other provisions.

(Disclosure: I have made films that have received New York State tax credits.)

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