NY City Council Passes Tax Incentive to Prevent Runaway Production

Entertainment workers in New York got another helping hand when the New York City Council voted on Dec. 15 to pass a five percent tax credit that is expected to prevent film and TV productions from fleeing the Big Apple in favor of cheaper locations.

The 48-1 vote on the Film Tax Credit Bill comes after Gov. George Pataki signed a law in August that offers a 10 percent rebate on labor-related costs for qualified productions that shoot in the state of New York. Both the new city incentive and the previously passed state incentive require 75 percent of production in New York.

"New York City is the greatest film set in the world," said Council Member David Yassky, who sponsored the bill. "Producers and directors already want to film here; we are merely making it financially possible."

The tax credit has already reaped its first reward. At the press conference to announce the signing of the bill, NBC announced that it planned to utilize the credit to shoot a new pilot revolving around New York police detectives in the 1970s in New York rather than in Toronto as was previously planned.

The film production industry is one of the fastest growing sectors of the state's economy. In New York alone, hundreds of films and television shows generate $5 billion a year in revenue as well as 100,000 jobs. In his September 2004 report "Current Trends in New York City Economy" State Comptroller Alan Hevesi found that in the first seven months of this year, the motion picture and sound recording industries posted one of the highest growth rates of any economic sub sector as it grew by an astounding 4,400 jobs.

While this figure is impressive, there is clearly room for expansion. Industry studies indicate that each year, the City looses millions of dollars in business to soundstages in Canada, Europe and other states, where film producers can utilize local tax subsidies.

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