§ 10-419 — Tax credits for accredited theater productions.

(a) As used in this section: (1) “Accredited theater production” means a for-profit live stage presentation that is (A) a pre-Broadway production, a post-Broadway production or a live theatrical tour, and (B) performed at a qualified production facility; (2) “Advertising and public relations expenditures” means costs incurred within the state by an accredited theater production for goods or services related to the national marketing of, public relations for and creation and placement of print, electronic, television, billboard and other forms of advertising to promote the accredited theater production; (3) “Payroll” means all salaries, wages, fees and other compensation, including related benefits for services performed within the state; (4) “Pre-Broadway production” means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and is scheduled to be presented in New York City's Broadway theater district not later than twelve months after the end date of such performance or performances in the state; (5) “Post-Broadway production” means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and opens its national tour in the state following a performance or performances of such presentation in New York City's Broadway theater district; (6) “Live theatrical tour” means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and opens its national tour in the state without a performance or performances of such presentation in New York City's Broadway theater district; (7) “Production and performance expenditures” means a contemporaneous exchange of cash or cash equivalent for goods or services related to the development, production or performance of or operating expenditures incurred in the state for an accredited theater production, including, but not limited to, (A) expenditures for design, construction and operation, including sets, special and visual effects, costumes, wardrobe, make-up and accessories, (B) costs associated with sound, lighting, staging, facility expenses, rentals, per diems and accommodations, and (C) payroll, advertising and public relations expenditures and transportation expenditures; (8) “Qualified production facility” means a facility located in the state at which live stage presentations are, or are intended to be, exclusively performed and that contains at least one stage, a seating capacity of one thousand or more seats and dressing rooms, storage areas and other ancillary amenities necessary for an accredited theater production; and (9) (A) “Transportation expenditures” means expenditures for (i) the packaging, crating and transporting, to and from the state, of sets, costumes and other tangible property and equipment used or to be used in an accredited theater production, and (ii) the transporting of cast and crew members of an accredited theater production to and from the state. (B) “Transportation expenditures” does not include any costs for the transporting of tangible property and equipment that are or will be used only for filming and not in an accredited theater production or any indirect costs, expenditures that are or will be reimbursed by a third party or any amounts that are paid to an individual or entity as a result of such individual's or entity's participation in profits from the exploitation of an accredited theater production. (b) (1) Any production company that receives a final accredited theater production certificate pursuant to the provisions of subsection (c) of this section shall be allowed a credit against the tax imposed by chapter 207, 208, 212 or 229, other than the liability imposed by section 12-707 , of thirty per cent of the production and performance expenditures of the accredited theater production. (2) If the production company is an S corporation or an entity treated as a partnership for federal income tax purposes, the credit may be claimed by the production company's shareholders or partners. If the production company is a single member limited liability company that is disregarded as an entity separate from its owner, the credit may be claimed by such limited liability company's owner, provided such owner is subject to the tax imposed under chapter 208 or 229. (3) The credit allowed under this section (A) shall be claimed for the income or taxable year in which the credit was earned and may be carried forward for not more than three immediately succeeding income or taxable years, and (B) may be sold, assigned or otherwise transferred, in whole or in part. (c) (1) Any individual, firm, partnership, trust, estate or other entity that is a production company of an accredited theater production or a sole proprietor, owner or member of a partnership that is a production company of an accredited theater production may apply to the Commissioner of Economic and Community Development, in such form and manner as prescribed by the commissioner, for initial certification of an accredited theater production. The application shall include information about the accredited theater production and the production company presenting such production, the applicant's relationship to such production or production company, the qualified production facility at which such production will be performed and any other information and data the commissioner deems necessary to evaluate the application. If the commissioner approves the application, the commissioner shall issue a notice of initial certification to the production company and the Commissioner of Revenue Services. (2) Upon completion of the accredited theater production performance or performances, the production company shall submit an application to the Commissioner of Economic and Community Development for a final certification of the accredited theater production. Such application shall include a cost report and a certification by a certified public accountant that such report, in such accountant's opinion, is accurate. The commissioner shall make a determination, not later than thirty days after a complete application has been submitted under this subdivision, whether to approve a final accredited theater production certificate and the amount of the credit to be allowed. (3) The total amount of credits allowed pursuant to this section shall not exceed two million five hundred thousand dollars in any one fiscal year. (4) If the commissioner approves a final accredited theater production certificate, the commissioner shall (A) issue such certificate to the production company and specify the amount of the credit allowed, and (B) provide notice of such final certification and the amount of the credit allowed to the Commissioner of Revenue Services. (d) Any production company that submits information to the Commissioner of Economic and Community Development that such production company knows to be fraudulent or false shall, in addition to any other penalties provided by law, be liable for a penalty equal to the amount of such production company's credit allowed under this section. (e) No credits sold, assigned or otherwise transferred pursuant to this section shall be subject to a post-certification remedy and the Commissioners of Economic and Community Development and Revenue Services shall have no right, except in the case of possible material misrepresentation or fraud, to conduct any further or additional review, examination or audit of the production and performance expenditures for which such credits were allowed. The sole and exclusive remedy of the commissioners shall be to seek collection of the amount of such credits from the production company that committed the fraud or misrepresentation. (f) The Commissioners of Economic and Community Development and Revenue Services may, for purposes of determining the correctness of any credit claimed pursuant to this section, examine any books, papers and records relating to the information or data provided with an application for a final certification of the accredited theater production. (g) Not later than March 1, 2025, and annually thereafter, the Commissioner of Economic and Community Development shall submit a report, in accordance with the provisions of section 11-4a , to the joint standing committees of the General Assembly having cognizance of matters relating to commerce and finance, revenue and bonding. Such report shall include, but not be limited to, information about any production companies that have applied in the preceding calendar year for initial or final certification of an accredited theater production, the status of such applications, descriptions of the production company, the accredited theater production and the qualified production facility at which the accredited theater production is or was presented and the amount of any credits allowed pursuant to this section in the preceding calendar year.

Legislative History

(P.A. 23-204, S. 372.) History: P.A. 23-204 effective January 1, 2024, and applicable to income and taxable years commencing on or after January 1, 2024.