Institutional Federal Compliance Report 2021

Tax Abatements For financial reporting purposes, a tax abatement is defined as an agreement between the government and an individual or entity through which the gov- ernment promises to forgo tax revenues and the indi- vidual or entity promises to subsequently take a specific action that contributes to economic development in the taxing entity’s jurisdiction or otherwise benefits the government or its citizens. As of March 31, 2019, the State provided tax abatements through the following programs: 78 • Notes to Basic Financial Statements __________________________________________________________________________

Program Name . . . . . . . . . . . . . . . . . . . . . . . . Film and Commercial Production Credit

Brownfields

Program Purpose . . . . . . . . . . . . . . . . . . . . . . The program is designed to increase the presence and overall positive impact of the film production and post-production industry on the State’s economy. Taxes being abated . . . . . . . . . . . . . . . . . . . . Personal income tax and Corporate franchise tax.

The program encourages cleanup and development of brownfield sites across the State to revitalize economically blighted communities. Personal income tax, Corporate franchise tax, Insurance tax and Corporate tax. State tax law: Article 22, Section 606(dd), 606(ee) and 606(ff) Article 9-A, Section 210-B(17), 210-B(18) and 210-B(19) Article 33, Section 1511(u), 1511(v) and 1511(w) Article 9, Sections 187-G, 187-H and 187-I The program requires an application with the project description, purpose and start and end date of remediation. The applicant commits to undertake remedial activities under the direction of the Department of Environmental Conservation.

Authority under which abatements are entered into . . . . . . . . . . . . . . . . . . . . .

State tax law: Article 22, Section 606(gg), 606(jj) and 606(qq) Article 9-A, Section 210-B(20), Section 210-B(23) and Section 210-B(32) Article 1, Section 24, 28 and 31

Criteria to be eligible to receive abatements and commitment of the taxpayer . . . . . . . .

The program is limited to feature films, television series, relocated television series, television pilots and films for television. The filming must be substantially in the State or the post-production work must be completed by a State company.

How taxes are reduced . . . . . . . . . . . . . . . . . Allowance of credit against taxes. Taxpayer receives the full amount of the credit regardless of its tax liability (refundable credit). How amount of abatement is determined . . . . The credit is 30 percent of qualified production and post-production costs. It increases by

Allowance of credit against taxes. Refundable credit.

Credits result from various percentages of costs associated with three components of cleanup and development: site preparation, tangible property and on-site groundwater remediation.

5 percent if post-production costs are incurred upstate and increases an additional 10 percent of any qualified labor expenses that are incurred in specific counties.

Provisions for recapturing abated taxes . . . . . N/A

N/A

Type of commitments other than taxes . . . . . . N/A

N/A

Total revenue estimated to be reduced for calendar year 2018 . . . . . . . . . $758 million

$130 million