The delayed New York State budget has been signed and sealed by Gov. Kathy Hochul with expanded incentives for film and television production. The news comes at the close of a frenetic week following Donald Trump’s bombshell proposal Sunday for tariffs on content produced outside the U.S.
California is working on a major expansion of its incentives. A plan unveiled by Trump’s Special Ambassador to Hollywood, Jon Voight, includes new federal tax credits for U.S. productions in addition to any state programs. But that’s being considered alongside a 120% import tax, which has panicked the film industry in the U.S. and globally. The administration has said no final decisions have been made and it’s unclear where this is headed.
Meanwhile, the sweetened New York package has bumping around since last year Gov. Hochul’s proposed budget that was signed by the Assembly and the State Senate, respectively, on Wednesday and Thursday. The incentives, running through 2036, survived intact with a few tweaks and the addition of music scoring costs, which are eligible an additional 10% incentive as long as five musicians are hired to perform work in New York State.
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The state offers a base 30% incentive with regional step ups. Its $700 million annual allocation was raised by $100 million with the fresh funds earmarked specifically for indie projects, defined as a producer not 51% or more owned by a company that is publicly traded in the U.S. – i.e. Hollywood studios.
The funding is fixed and set aside as follows: $20 million for projects with budgets less than $10 million, and $80 million for projects with budgets more than $10 million. Once the $100 million is allocated, no additional projects can be accepted in the current year. An independent production company cannot submit more than two applications per year.
Summary of other key provisions with latest changes:
Production Plus program: will provide addition tax credits for larger productions. A production company and its affiliates that have submitted 2 or more initial applications with combined total qualified NY production costs of $100 million or more can apply to the program, and subsequent productions by the same company and its affiliates will be eligible for a 10% increase in their incentive amount – so equal, for example, to a 40% incentive in NYC — until the end of 2028. An episodic series will be eligible for the uplift until the show is canceled.
Above-the-Line Labor: Previously, ATL costs were capped at $500k per person and limited to 40% of all other qualified below-the-line and vendor costs. Under the new law, the $500k cap has been removed. The overall cap of 40% of BTL and vendor costs remains in effect.
Post-Only Credit: Prior requirements for the post-only credit required that 75% of the post production budget (not including VFX/Animation) must be undertaken in NY to qualify. Under the new program changes, a production can earn a post-only credit if 75% of post or $1 million of costs are spent in NYS.
VFX/Animation-only Credit: Eligibility requirements changed from 20% of the VFX/Animation budget or a spend of $3 million in NY to 10% of the budget or $500k spent in NY.
Accelerated Recovery of Credit: For applications filed after January 1, 2025, the production can claim its credit in the allocation year. The requirement that credits of more than $5 million must then be paid over three years, beginning with the allocation year, has been removed. The idea is to significantly reduce delays in credit allocation, a complaint producers have had about filming in New York, allowing companies to claim the full credit in the first year, benefiting both major productions and independent projects.
Music Scoring. Music scoring costs earn an additional 10% incentive as long as five musicians are hired to perform work in New York State.
“Congratulations and thank you to Governor Hochul and state lawmakers for this momentous expansion of what is a proven economic driver for New York,” said Charles Rivkin, chairman and CEO of the MPA, in a statement this morning.
“Film and TV production brings jobs, supports local businesses, and drives economic growth. Whenever a major production shoots on location, it adds $1.3 million to communities and local economies every day of filming. The enhanced and extended film incentive program will further cement New York as a leader in the entertainment and creative sectors,” Rivkin said. “As the outpouring of support from across the state has made clear, New York crews, creatives, and small businesses are applauding leaders in Albany today.”
In California, new incentives are working through the state legislature. Gov. Gavin Newsom’s proposals would increase to the overall cap on incentives to $750 million annually, a major jump from the current $330 million cap. The proposal would also modernize the program in several ways, including by expanding the definition of a qualified motion picture to include series with episodes averaging 20 minutes or more, animation films, series, and shorts, and large-scale competition shows.
Additionally, the bills propose increasing the available credit amount for an individual project from 20% to 35% for amounts paid or incurred in Los Angeles, also giving the California Film Commission leeway to allow for additional credit percentages by 5% in other areas of economic opportunity.