Qualified Musical and Theatrical
Production Credit Program
COVID-19 Business Update
On July 22, 2021, New York Governor Andrew M. Cuomo announced the launch of a new $100 million New York City Musical and Theatrical Production Tax Credit designed to help revitalize an industry vital to the state’s continued economic recovery.
The new tax credit, part of New York’s Pandemic Recovery and Restart Program, provides 25% of qualified production expenditures for eligible businesses. The program is a two-year program and companies can receive credits for tax years beginning on or after January 1, 2021, but before January 1, 2024. The credit is available to businesses principally engaged in the production of a qualified musical or theatrical production that is to be performed in a qualified New York City production facility, and that have incurred qualified expenditures during the credit period of April 19, 2021, to March 31, 2023.
- For-profit business is principally engaged in producing a live, scripted, dramatic performance with one or multiple performers.
- Ballet, opera, musical solo, group, band, or orchestral performances, and stand-up comedy performances are not eligible.
- Production is performed in a qualified production facility in New York City:
- The facility is intended to host live theatrical productions with a stage, dressing room, and other amenities.
- Seats 500+.
- Receipts from ticket sales are 75% or more of gross receipts.
- Incurred cost for property used or services performed in the production of a qualified musical and theatrical production in the State of New York, including:
- Design, construction, and operation (costumes, wardrobes, makeup, sound, lighting, payroll) not to exceed $200,000 per week.
- Up to 50% of total advertising and marketing costs incurred and paid in New York State.
- A refundable credit is 25% of qualified production expenditures during the credit period.
- Credit is limited to:
- $3 million per production for first-year program applicants.
- $1.5 million per production for second-year program applicants.
- The credit period starts 12 weeks before the first paid public performance of the qualified production after April 19, 2021, and ends the earlier of:
- When sufficient funds are expended to hit the cap,
- The production closes, or
- No later than March 31, 2023.
- The partners in a partnership or shareholders of S-corporations that receive the credit are allowed a prorated share of the credit.
- Other requirements – All applicants must also:
- Participate in diversity training.
- Implement a plan to ensure the production is accessible to low-income New Yorkers.
- Contribute up to 50% of the credit to the New York State Council on the Arts Cultural Program Fund. (Depending on growth targets.)
HOW TO APPLY
Complete an initial application before the first paid performance (10 days before such performance is strongly encouraged) – no later than December 31, 2022, with the following information:
- Project summary.
- Production venue and operating budgets.
- Weekly payroll report.
- A diversity and arts job training program plan.
- Public access and availability plan.
The applicant must agree within the Project Summary to contribute to the New York State Council on the Arts Cultural Program Fund if ongoing revenues are more than two times ongoing production costs, after receiving a tax credit.
Complete a final application (due no later than 90 days after the production closes or 90 days following the program end date of March 31, 2023, whichever comes first), including General Ledger and General Ledger Reports that correspond to the budget categories identified in the project summary.
The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.