The film and television industry is a major contributor to New York’s economy and it is in the State’s interest to boost it with tax breaks.
New York state’s biggest industry-specific tax break goes to the film industry, which retains $700 million a year to film or do post-production work within the state. Governor Hochul and other legislative leaders have been considerable supporters of the program, which has aided in bringing in hundreds of productions over the years.
TV Shows like “Saturday Night Live”, “Blue Bloods”, “New Amsterdam”, and “God Friended me” all claimed the tax credit in 2023, totaling more than $20 million each, as cited by state records.
Last year, Hochul and the lawmakers extended the Film Tax Credit for an additional 10 years, scheduling the breaks to run through 2034.
But in a recent report that was released without any fanfare, it was revealed that the incentive has failed to produce the returns that people were hoping for, according to a new analysis officiated by New York itself.
In the 359-page report by the state Department of Taxation and Finance last month, showed that this particular tax credit drew in an estimated 15 cents in direct tax revenue. For indirect and induced jobs- which includes employees who don’t work directly on production but whose employment originates from it- the return was raised to 31 cents.
“Based on an objective weighing of the costs and benefits, the film production credit is at best a break-even proposition and more likely a net cost to the state,” according to the report.
The analysis, authored by consultant PFM Group, was required by lawmakers two years ago. The state legislature ordered the report as part of the state budget process in 2022, insisting New York hire an independent consultant to examine if taxpayers are getting an adequate return on the breaks.
