Requires third-party verification of an application to receive the Empire State film production credit and the Empire State film post production credit by approved certified public accountants.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8200
SPONSOR: Tapia TITLE OF BILL:
An act to amend the tax law, in relation to requiring third-party
verification of an application to receive the Empire State film
production credit and the Empire State film post production credit
PURPOSE:
This bill requires third-party verification of an application to receive
the Empire State film production credit and the Empire State film post
production credit
SUMMARY OF PROVISIONS:
Section 1: Amends Subdivision (a) of section 24 of the tax law by adding
a new paragraph 6.
Section 2: Amends subdivision (a) of section 31 of the tax law by adding
a new paragraph 7.
Section 3: Sets effective date.
JUSTIFICATION:
The Empire State film production credit and the Empire State film post-
production credit are some of the most costly of New York's economic tax
incentive programs. A 2024 independent analysis commissioned by the
Department of Tax and Finance under the Fiscal Year 2022-23 Enacted
Budget reviewed all economic tax incentives, including these film cred-
its, and highlighted that other states, such as Connecticut and New
Jersey, require an independent post-production audit to qualify for the
incentive, ensuring greater accountability and accuracy in the adminis-
tration of their film tax credit programs.
Currently, Empire State Development (ESD), the state agency overseeing
these film credits, offers an optional program allowing productions to
have their final applications reviewed by pre-qualified CPA firms.
While this process can expedite final approval, it remains optional
rather than a mandatory safeguard against potential fraud, misreporting,
or inefficiencies in the allocation of tax credits.
This legislation will codify a requirement for third-party verification
into state law, strengthening oversight and aligning New York with best
practices already in place in neighboring states. A mandatory independ-
ent review would enhance transparency, reduce the risk of improper
claims, and ensure that and reinforce the state's commitment to both
economic development and fiscal responsibility.
LEGISLATIVE HISTORY:
New Bill
FISCAL IMPLICATIONS:
None to the State
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8200
2025-2026 Regular Sessions
IN ASSEMBLY
May 5, 2025
___________
Introduced by M. of A. TAPIA -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to requiring third-party
verification of an application to receive the Empire State film
production credit and the Empire State film post production credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (a) of section 24 of the tax law is amended by
2 adding a new paragraph 6 to read as follows:
3 (6) (i) For the purposes of this paragraph, the term "approved certi-
4 fied public accountants" shall mean independent, third party, in-state
5 certified public accountants approved by the department of economic
6 development to provide third-party verification services required under
7 this paragraph.
8 (ii) On or after January first, two thousand twenty-six, a taxpayer
9 which is a qualified film production company, or a qualified independent
10 film production company, or which is a sole proprietor of or a member of
11 a partnership which is a qualified film production company or a quali-
12 fied independent film production company, and which is subject to tax
13 under articles nine-A or twenty-two of this chapter, shall, as a condi-
14 tion for the granting of the credit as part of the taxpayer's final
15 application for the credit, submit to the department of economic devel-
16 opment a third-party verification of their final application performed
17 by approved certified public accountants. The costs of such third-party
18 verification shall not be claimed as an expense for the purposes of this
19 section.
20 (iii) The department of economic development shall maintain a list of
21 certified public accountants which shall be utilized to provide the
22 third-party verification services pursuant to this paragraph. The
23 department of economic development shall develop procedures and perform-
24 ance standards for such certified public accountants and any certified
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09244-01-5
A. 8200 2
1 public accountants failing to meet the requirements of such procedures
2 and performance standards shall be removed from the list immediately.
3 § 2. Subdivision (a) of section 31 of the tax law, as added by section
4 12 of part Q of chapter 57 of the laws of 2010, is amended by adding a
5 new paragraph 7 to read as follows:
6 (7) (i) For the purposes of this paragraph, the term "approved certi-
7 fied public accountants" shall mean independent, third party, in-state
8 certified public accountants approved by the department of economic
9 development to provide third-party verification services required under
10 this paragraph.
11 (ii) On or after January first, two thousand twenty-six, a taxpayer
12 which is a qualified film production company, or a qualified independent
13 film production company, or which is a sole proprietor of or a member of
14 a partnership which is a qualified film production company or a quali-
15 fied independent film production company, and which is subject to tax
16 under articles nine-A or twenty-two of this chapter, shall, as a condi-
17 tion for the granting of the credit as part of the taxpayer's final
18 application for the credit, submit to the department of economic devel-
19 opment a third-party verification of their final application performed
20 by approved certified public accountants. The costs of such third-party
21 verification shall not be claimed as an expense for the purposes of this
22 section.
23 (iii) The department of economic development shall maintain a list of
24 certified public accountants which shall be utilized to provide the
25 third-party verification services pursuant to this paragraph. The
26 department of economic development shall develop procedures and perform-
27 ance standards for such certified public accountants and any certified
28 public accountants failing to meet the requirements of such procedures
29 and performance standards shall be removed from the list immediately.
30 § 3. This act shall take effect immediately.
