Amends the eligibility criteria for game development companies by changing the yearly timeframe structure, lowering the dollar threshold per production, removing the in-state cost incurred threshold to accurately fit current digital gaming industry models, increasing the amount of the tax credit and extending the time in which to claim the credit.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7126A
SPONSOR: McDonald TITLE OF BILL:
An act to amend the tax law, in relation to the eligibility criteria for
the digital gaming tax credit
PURPOSE OF THE BILL:
This bill would amend the Digital Gaming Media Production Credit by
enhancing the eligibility criteria to the credit to better allow the New
York gaming industry access to the incentives. This bill would also
amend the credit to increase the annual funding cap to better incentiv-
ize the industry to locate in New York State.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends the eligibility criteria for game development compa-
nies by changing the yearly timeframe structure, lowering the dollar
threshold per production and by removing the in-state cost incurred
threshold to accurately fit current digital gaming industry models. It
also increases the annual allocation from five million dollars to one
hundred million dollars.
Section 2 amends the credit by removing the annual single taxpayer cap
as it applies to section 210-B of the tax law.
Section 3 amends the credit by removing the annual single taxpayer cap
as it applies to section 606 of the tax law.
Section 4 contains the effective date of the bill.
JUSTIFICATION:
In 2022, as part of the final state budget, the Legislature passed and
the Governor signed the empire state digital gaming media production
credit. This was a vital first step into recognizing the growing video
game development industry in the state and to help attract out of state
developers to come into New York and take advantage of incentives to
grow the industry. The credit is designed to provide meaningful and
effective incentives to an industry critical to future economic develop-
ment throughout the State. Unfortunately, as the credit is in its
initial year of being implemented, -it has been discovered that the
current eligibility requirements under the law are making it extremely
difficult for a significant number of New York gaming development
companie8 to be eligible for the credit despite them falling under the
intent of the incentive. The current criteria does not fit the realities
of the gaming development industry and these changes are needed to
ensure the credit is utilized to its maximum potential. This bill would
also increase the incentive amount to provide a realistic fiscal incen-
tive that would actually encourage both large and small video game
develOpment companies to locate in New York.
PRIOR LEGISLATIVE HISTORY:
New Bill
FISCAL IMPLICATIONS:
Up to $100 million a year in tax expenditures.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on and after Janurary 1, 2023 and before January 1, 2030.
