NY Music Industry Seeks Tax Incentives
- Sales Tax News
- Oct 10, 2014 | Gail Cole
The film industry gets them. Boeing gets them. Now the New York music industry wants them. Tax incentives.
To bring back the film industry's heyday, California recently extended film tax credits and created new tax incentives. Maryland upped tax incentives in order to keep the Netflix series House of Cards for another season. And New York bent over backwards this summer to keep CBS and The Late Show in NYC, offering to renovate the historic Ed Sullivan Theatre and provide CBS with at least $11 million in performance-based Excelsior tax credits.
In return, states receive not just bragging rights but jobs and economic stimulation. When Kevin Spacey, Robin Wright and the rest of the House of Cards gang are filming in Baltimore, they stay in hotels and dine in restaurants. Equipment is rented. Extras hired.
Everyone is happy. Except maybe the industries that don’t receive any tax incentives.
New York Is Music, a new coalition, is “encouraging the State Legislature to pass a bill to give $60 million in tax breaks each year to studios, record companies and others involved in the creation of music.” The hope is to secure New York as the epicenter of the global music industry, a position that is eroding as costs skyrocket and musicians move to less expensive places to record, like Texas and Georgia. (NY Times).
The proposed legislation would provide a 20% credit “on expenses related to music production.” Democratic Assemblyman Jospeh R. Lentol, who introduced the bill, promised that “Billy Joel is not going to get a tax credit, nor is Jay Z. It’s going to be the working stiff that gets the credit.”
Nonetheless, it could be a hard sell. Governor Andrew M. Cuomo may have enthusiastically announced the agreement between the state and The Late Show, but a tax reform panel in his government has recommended the state’s film credit be significantly reduced because it “does not appear to pay for itself in its current form.”
Tax incentives do draw businesses, but some states are willing to cut them anyway. Take North Carolina, where the hugely successful Hunger Games films were shot. On January 1, 2015, the state’s generous film tax incentive package will be replaced with a $10 million competitive grant program with a cap per production. Will the industry still film there? A spokesman from the Motion Picture Association of America says that “grant program is significantly underfunded to support the level of jobs, spending and local investment in North Carolina.” So there it is.
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