The independent film world has dreaded this for months. When Governor Andrew Cuomo signed New York State’s 2021 budget last week, he confirmed changes to New York’s Film and TV tax incentive that were negotiated pre-COVID-19. The annual monies earmarked for the incentive program will remain the same ($420 million), but the rebate has been lowered to 25 percent, down from 30 percent. However, the hardest news for many independent filmmakers is that the minimum spend required to qualify for the rebate is now an impossible gap.
New York City-based productions (including neighboring suburban counties of Westchester, Rockland, Nassau, and Suffolk) must now have below-the-line costs of at least $1 million to qualify for the rebate. (That minimum drops to $250,000 for projects shooting in the rest of the state.) Above-the-line items like salaries for producers, writers, directors, and cast don’t count toward that minimum. However, there is a curious exemption: TV pilots face no minimum requirements for rebates.
There’s a political reason for this. Ultimately, the incentive program is meant to keep good-paying union jobs in New York. However, most independent film productions are either non-union, or take advantage of low-budget agreements in which cast and crew take a substantial pay cut. (It’s worth noting that a large percentage of New York’s highly skilled filmmaking talent cut its teeth in the city’s robust indie film world.)
Implemented in 2008, the New York Film and TV tax incentive program is credited with reversing the downward spiral of New York production. In the last two years, it’s become an increasingly contentious issue as politicians question the wisdom of subsidizing corporate-owned Hollywood studios. That led to these negotiated pullbacks, along with the state’s $6 billion budget deficit.
Since then, of course, the state also has become ground zero of the COVID-19 crisis. While Albany will likely look for incentives to stimulate the decimated economy, it is entirely possible that film and TV production will not be viewed as a priority (especially in the face of a state deficit estimated to have doubled in the last two months). So while the new rules hurt indie filmmakers, re-upping the incentive and extending the sunset date by one year (to December 31, 2025) came as a relief to many in the film/TV world.
In addition to independent film production, variety and talk shows are the hardest hit under the new regulations. Many politicians argued the New York City backdrop of shows like “Saturday Night Live” are not in danger of leaving the state and therefore are no longer considered qualified productions. An exemption was made for variety programming (like “SNL”) that was already shooting in the state prior to April 2020.