S 4715: 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 2025-2026 Regular Sessions  IN SENATE February 12, 2025 ___________ Introduced by Sen. FAHY -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue AN ACT to amend the tax law, in relation to the eligibility criteria for the digital gaming tax credit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivisions (b) and (c) of section 45 of the tax law, as 2 added by section 1 of part OO of chapter 59 of the laws of 2022, are 3 amended to read as follows: 4 (b) Allocation of credit. The aggregate amount of tax credits allowed 5 under this section, subdivision fifty-five of section two hundred ten-B 6 and subsection (nnn) of section six hundred six of this chapter in any 7 taxable year shall be five million dollars. Such credit shall be allo- 8 cated by the department of economic development in order of priority 9 based upon the date of filing an application for allocation of digital 10 gaming media production credit with such office. An applicant shall 11 submit an annual application which shall include all qualified digital 12 gaming media productions for the taxable year along with an estimate of 13 the digital gaming media production costs. The application can be 14 submitted no earlier than ninety days prior to the first day of the 15 applicable taxable year. If the total amount of allocated credits 16 applied for in any particular year exceeds the aggregate amount of tax 17 credits allowed for such year under this section, such excess shall be 18 treated as having been applied for on the first day of the subsequent 19 taxable year. 20 (c) Definitions. As used in this section: 21 (1) "Qualified digital gaming media production" means: (i) a website, 22 the digital media production costs of which are paid or incurred predo- 23 minately in connection with (A) video simulation, animation, text, 24 audio, graphics or similar gaming related property embodied in digital 25 format, and (B) interactive features of digital gaming (e.g., links, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06207-01-5 
 S. 4715 2 1 message boards, communities or content manipulation); (ii) video or 2 interactive games produced primarily for distribution over the internet, 3 wireless network or successors thereto; and (iii) animation, simulation 4 or embedded graphics digital gaming related software intended for 5 commercial distribution regardless of medium; provided, however, that 6 the qualified digital game development media productions described in 7 subparagraphs (i) through (iii) of this paragraph must have digital 8 media production costs equal to or in excess of [one hundred] fifty 9 thousand dollars per production. A qualified digital gaming media 10 production does not include a website, video, interactive game or soft- 11 ware that is used predominately for: electronic commerce (retail or 12 wholesale purposes other than the sale of video interactive games), 13 gambling (including activities regulated by a New York gaming agency), 14 or political advocacy purposes. 15 (2) "Digital gaming media production costs" means any costs for wages 16 [or salaries] paid to individuals, [other than actors or writers,] 17 directly employed for services performed by those individuals directly 18 [and predominantly] in the creation of a digital gaming media production 19 or productions. [Up to one hundred thousand dollars in wages and sala- 20 ries paid to such employees, other than actors and writers, directly 21 employed shall be used in the calculation of this credit.] Digital 22 gaming media production costs include but shall not be limited to 23 payments for services performed directly [and predominantly] in the 24 development (including concept creation), [design,] production (includ- 25 ing concept creation), design, production (including testing), editing 26 (including encoding) and compositing (including the integration of 27 digital files for interaction by end users) of digital gaming media. 28 Digital gaming media production costs shall not include expenses 29 incurred for the distribution, marketing, promotion, or advertising 30 content generated by end users, other costs not directly [and predomi- 31 nantly] related to the creation, production or modification of digital 32 gaming media or costs used by the taxpayer as a basis of the calculation 33 of any other tax credit allowed under this chapter. In addition, [sala- 34 ries or other income distribution] wages related to the creation of 35 digital gaming media for any person who predominately serves in a corpo- 36 rate capacity in the role of chief executive officer, chief financial 37 officer, president, treasurer or similar corporate position and who is 38 not directly engaged in services related to the creation of a digital 39 gaming media production or productions shall not be included as digital 40 gaming media production costs if the digital gaming media production 41 entity has more then ten employees. [Salaries or other income] Wages 42 paid to a person serving in such a role for the digital gaming media 43 production entity shall also not be included if the person was employed 44 by a related person of the digital gaming media production entity within 45 sixty months of the date the digital gaming media production entity 46 applied for the tax credit certificate described in subdivision (d) of 47 this section. For purposes of the preceding sentence, a related person 48 shall have the same meaning as the term "related person" in section four 49 hundred sixty-five of the internal revenue code. [Furthermore, any 50 income or other distribution to any individual including, but not limit- 51 ed to, licensing or royalty fees, who holds an ownership interest in a 52 digital gaming media production entity, whether or not such individual 53 is serving in the role of chief executive officer, chief financial offi- 54 cer, president, treasurer or similar position for such an entity, shall 55 not be included as digital gaming media production costs. Up to four 56 million dollars in qualified digital gaming media production costs per 
 S. 4715 3 1 production shall be used in the calculation of this credit.] Digital 2 gaming media production costs shall not include those costs used by the 3 taxpayer or another taxpayer as the basis calculation of any other tax 4 credit allowed under this chapter. 5 (3) "Qualified digital gaming media production costs" means digital 6 gaming media production costs only to the extent such costs are attrib- 7 utable to the use of property or the performance of services by any 8 persons within the state directly [and predominantly] in the creation, 9 production or modification of digital gaming related media. [Such total 10 production costs incurred and paid in this state shall be equal to or 11 exceed seventy-five percent of total cost of an eligible production 12 incurred and paid within and without this state.] 13 (4) "Digital gaming media production entity" means a corporation, 14 partnership, limited partnership or other entity or individual engaged 15 in qualified digital game development media production. 16 § 2. This act shall take effect immediately and shall apply to taxable 17 years beginning on and after January 1, 2025 and before January 1, 2029.