As with many states across America, New York offers tax incentives for activities associated with New York City video production.
These incentives are created to encourage producers to choose New York as the location for shooting and producing their films, thereby creating local jobs and boosting tourism.
What Qualifies as New York City Film Production? If you are creating a feature film, television film, documentary, commercial, or other similar types of video in New York City, you are eligible for state and local sales tax exemptions on certain items related to the film production.
Purchases of property, services, and utilities related to pre-production, production, post-production, and sale and distribution of your film qualify.
This includes set construction, wardrobes and props, and editing the film, just to name a few eligible costs.
In order to receive these tax exemptions, you must register as a New York State sales tax vendor and issue tax exemption certificates to other vendors when appropriate.
Tax Exemptions on the Sale of a Film In New York, sales and use tax is imposed on the total selling price of a film.
The vendor selling the film is responsible for collecting this sales tax, and the percentage is decided based on the tax laws of the location where the film is originally delivered.
If the film is delivered out-of-state, no New York sales and use taxes apply.
Any analog or digital materials separate from the original film that is used by theaters or cable companies to distribute the film are considered separate from the sale of the film.
Furthermore, if the video is delivered in an intangible form (either within New York or out-of-state), it is not taxable under New York law.
Right to Reproduce Granting a right to reproduce is not subject to sales and use tax in New York because it is neither a sale nor a license to use or exhibit.
It is important to note, if you are creating a film with the intention to grant a right to reproduce instead of just selling or licensing the film for distribution, you are not eligible for the sales tax exemptions associated with the production of the film.
If you create a film and sell the license to exhibit to one or more parties and you grant the right to reproduce, you are still eligible for qualifying tax exemptions.
What Does Not Qualify for Tax Exemption? Because only personal property, services, and utilities that are used primarily for the production of the film are eligible for sales and use tax exemptions, all costs associated with administrative services are taxable.
These activities include general office work, sales promotions, making travel arrangements, ordering materials, preparing shooting schedules, and administering payroll records.
This also means that the electricity used for a film set is exempt from sales tax, while electricity for offices and trailers is taxable.
If you are planning to produce and sell a film in New York City, it is important to understand the laws regarding sales and use tax exemptions for property, services, and utilities used in the making of the film.
For more information, visit the New York State Department of Taxation and Finance page for Film Production in New York State.