Extends the period during which the empire state digital gaming tax credit may be claimed to 01/01/2032; amends the eligibility criteria for game development companies by changing the yearly timeframe structure, lowering the dollar threshold per production, and removing the in-state cost incurred threshold to accurately fit current digital gaming industry models; allows unused credits to be rolled over to the following tax year.
STATE OF NEW YORK
________________________________________________________________________
4715--A
2025-2026 Regular Sessions
IN SENATE
February 12, 2025
___________
Introduced by Sens. FAHY, COONEY -- read twice and ordered printed, and
when printed to be committed to the Committee on Budget and Revenue --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the tax law, in relation to extending the period during
which the empire state digital gaming media production tax credit may
be claimed, the eligibility criteria for such tax credit, and allowing
unused allowable credits to be rolled over to the following tax year
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1 of subdivision (a) and subdivisions (b) and (c)
2 of section 45 of the tax law, as added by section 1 of part OO of chap-
3 ter 59 of the laws of 2022, are amended to read as follows:
4 (1) A taxpayer which is a digital gaming media production entity
5 engaged in qualified digital gaming media production, or who is a sole
6 proprietor of or a member of a partnership, which is a digital gaming
7 media production entity engaged in qualified digital gaming media
8 production, and is subject to tax under article nine-A or twenty-two of
9 this chapter, shall be allowed a credit against such tax to be computed
10 as provided herein for taxable years beginning on or after January
11 first, two thousand twenty-three and before January first, two thousand
12 [twenty-eight] thirty-two.
13 (b) Allocation of credit. The aggregate amount of tax credits allowed
14 under this section, subdivision fifty-five of section two hundred ten-B
15 and subsection (nnn) of section six hundred six of this chapter in any
16 taxable year shall be five million dollars. Such credit shall be allo-
17 cated by the department of economic development in order of priority
18 based upon the date of filing an application for allocation of digital
19 gaming media production credit with such office. An applicant shall
20 submit an annual application which shall include all qualified digital
21 gaming media productions for the taxable year along with an estimate of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06207-05-5
S. 4715--A 2
1 the digital gaming media production costs. The application can be
2 submitted no earlier than ninety days prior to the first day of the
3 applicable taxable year. If the total amount of allocated credits
4 applied for in any particular year exceeds the aggregate amount of tax
5 credits allowed for such year under this section, such excess shall be
6 treated as having been applied for on the first day of the subsequent
7 taxable year. Provided, however, that for taxable years beginning on or
8 after January first, two thousand twenty-three, if the total amount of
9 allocated credits applied for in any particular year is less than the
10 aggregate amount of tax credits allowed for such year under this
11 section, any unused portion may be carried over and added to the aggre-
12 gate amount of credits allowed in the next succeeding taxable year or
13 years.
14 (c) Definitions. As used in this section:
15 (1) "Qualified digital gaming media production" means: (i) a website,
16 the digital media production costs of which are paid or incurred predo-
17 minately in connection with (A) video simulation, animation, text,
18 audio, graphics or similar gaming related property embodied in digital
19 format, and (B) interactive features of digital gaming (e.g., links,
20 message boards, communities or content manipulation); (ii) video or
21 interactive games produced primarily for distribution over the internet,
22 wireless network or successors thereto; and (iii) animation, simulation
23 or embedded graphics digital gaming related software intended for
24 commercial distribution regardless of medium; provided, however, that
25 the qualified digital game development media productions described in
26 subparagraphs (i) through (iii) of this paragraph must have digital
27 media production costs equal to or in excess of [one hundred] fifty
28 thousand dollars per production. A qualified digital gaming media
29 production does not include a website, video, interactive game or soft-
30 ware that is used predominately for: electronic commerce (retail or
31 wholesale purposes other than the sale of video interactive games),
32 gambling (including activities regulated by a New York gaming agency),
33 or political advocacy purposes.
34 (2) "Digital gaming media production costs" means any costs for wages
35 [or salaries] paid to individuals, [other than actors or writers,]
36 directly employed for services performed by those individuals directly
37 [and predominantly] in the creation of a digital gaming media production
38 or productions. [Up to one hundred thousand dollars in wages and sala-
39 ries paid to such employees, other than actors and writers, directly
40 employed shall be used in the calculation of this credit.] Digital
41 gaming media production costs include but shall not be limited to
42 payments for services performed directly [and predominantly] in the
43 development (including concept creation), [design,] production (includ-
44 ing concept creation), design, production (including testing), editing
45 (including encoding) and compositing (including the integration of
46 digital files for interaction by end users) of digital gaming media.
47 Digital gaming media production costs shall not include expenses
48 incurred for the distribution, marketing, promotion, or advertising
49 content generated by end users, other costs not directly [and predomi-
50 nantly] related to the creation, production or modification of digital
51 gaming media or costs used by the taxpayer as a basis of the calculation
52 of any other tax credit allowed under this chapter. In addition, [sala-
53 ries or other income distribution] wages related to the creation of
54 digital gaming media for any person who predominately serves in a corpo-
55 rate capacity in the role of chief executive officer, chief financial
56 officer, president, treasurer or similar corporate position and who is
S. 4715--A 3
1 not directly engaged in services related to the creation of a digital
2 gaming media production or productions shall not be included as digital
3 gaming media production costs if the digital gaming media production
4 entity has more then ten employees. [Salaries or other income] Wages
5 paid to a person serving in such a role for the digital gaming media
6 production entity shall also not be included if the person was employed
7 by a related person of the digital gaming media production entity within
8 sixty months of the date the digital gaming media production entity
9 applied for the tax credit certificate described in subdivision (d) of
10 this section. For purposes of the preceding sentence, a related person
11 shall have the same meaning as the term "related person" in section four
12 hundred sixty-five of the internal revenue code. [Furthermore, any
13 income or other distribution to any individual including, but not limit-
14 ed to, licensing or royalty fees, who holds an ownership interest in a
15 digital gaming media production entity, whether or not such individual
16 is serving in the role of chief executive officer, chief financial offi-
17 cer, president, treasurer or similar position for such an entity, shall
18 not be included as digital gaming media production costs. Up to four
19 million dollars in qualified digital gaming media production costs per
20 production shall be used in the calculation of this credit.] Digital
21 gaming media production costs shall not include those costs used by the
22 taxpayer or another taxpayer as the basis calculation of any other tax
23 credit allowed under this chapter.
24 (3) "Qualified digital gaming media production costs" means digital
25 gaming media production costs only to the extent such costs are attrib-
26 utable to the use of property or the performance of services by any
27 persons within the state directly [and predominantly] in the creation,
28 production or modification of digital gaming related media. [Such total
29 production costs incurred and paid in this state shall be equal to or
30 exceed seventy-five percent of total cost of an eligible production
31 incurred and paid within and without this state.]
32 (4) "Digital gaming media production entity" means a corporation,
33 partnership, limited partnership or other entity or individual engaged
34 in qualified digital game development media production.
35 § 2. Paragraph (a) of subdivision 55 of section 210-B of the tax law,
36 as added by section 2 of part OO of chapter 59 of the laws of 2022, is
37 amended to read as follows:
38 (a) Allowance of credit. A taxpayer who is eligible pursuant to
39 section forty-five of this chapter shall be allowed a credit to be
40 computed as provided in such section forty-five against the tax imposed
41 by this article. [Under no circumstances may a single taxpayer receive
42 more than one million five hundred thousand dollars in tax credits per
43 year.]
44 § 3. Paragraph 1 of subsection (nnn) of section 606 of the tax law, as
45 added by section 4 of part OO of chapter 59 of the laws of 2022, is
46 amended to read as follows:
47 (1) Allowance of credit. A taxpayer who is eligible pursuant to
48 section forty-five of this chapter shall be allowed a credit to be
49 computed as provided in such section forty-five against the tax imposed
50 by this article. [Under no circumstances may a single taxpayer receive
51 more than one million five hundred thousand dollars in tax credits per
52 year.]
53 § 4. This act shall take effect immediately and shall apply to taxable
54 years beginning on and after January 1, 2025 and before January 1, 2032.
