NEW YORK, April 1 (Reuters) - New York state has extended a 30 percent film and television production tax credit for one year, which the industry welcomed on Wednesday but said lacked the long-term certainty needed to attract business.
As part of a $132 billion budget unveiled on Tuesday aiming to tackle a two-year $17.7 billion deficit, New York Governor David Paterson and legislative leaders agreed to provide $350 million to extend the production tax break.
The budget has been passed by the lower house Assembly and is likely to be voted on by the Senate later this week.
The industry had been lobbying either for a multi-year extension or for the tax credit to be made permanent.
“We’re pleased the legislature and the governor extended the program but disappointed that it’s not a multi-year program, and we’re hopeful that they will consider revisiting it before the end of the legislative session,” said Vans Stevenson, senior vice president of the Motion Picture Association of America.
New York state implemented a 10 percent tax credit in 2004 and raised it to 30 percent last year. However, $460 million in funding that had been expected to last until 2013 was exhausted in less than a year and ran out in February.
As a result, Warner Bros. Television TWX.N has moved production of its hit science-fiction series "Fringe" to Vancouver and no pilot shows are due to be filmed in New York this year, compared with 19 last year.
REVENUES AND JOBS
“New York belongs in front of the cameras,” said Paterson. “In these challenging times, we must continue to make smart investments that create jobs, revive our economy and expand opportunities for all New Yorkers.”
An Ernst and Young report forecast that between 2005 and 2010, television and film productions and related activities would generate about $2.7 billion in state and city tax revenues, compared with an estimated $690 million in state and city tax credits claimed during the same period.
The industry also created 7,031 direct jobs and 12,481 indirect jobs in 2007, the report showed.
New York state’s 30 percent fully refundable credit is applied to the applicant’s state tax return for the year in which the production was completed. New York City also offers an additional 5 percent production tax credit.
“The extension will help most existing shows to remain and it will be good for the movies that come to New York,” said Alan Suna, chief executive of Silvercup Studios in the city’s Queens borough.
“Where it falls short ... is a one-year deal does not help New York attract new television series and the new jobs that come along with it.
"The TV business is kind of the back bone of the business in New York," said Suna, whose studios are home to NBC's GE.N "30 Rock," Warner Bros. "Gossip Girl" and ABC's "Ugly Betty." (Editing by Ellen Wulfhorst and John O'Callaghan)
Our Standards: The Thomson Reuters Trust Principles.