Tax Credits, Deductions and Exemptions

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      in Theater

      As Broadway Struggles, Governor Hochul Proposes Expanded Tax Credit

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      With Omicron complicating Broadway’s return, Gov. Kathy Hochul proposed more assistance for commercial theater, which her budget director called “critical for the economy.”As Broadway continues to reel from the economic effects of the coronavirus pandemic, Gov. Kathy Hochul is proposing to expand and extend a pandemic tax credit intended to help the commercial theater industry rebound.Ms. Hochul on Tuesday proposed budgeting $200 million for the New York City Musical and Theatrical Production Tax Credit, which provides up to $3 million per show to help defray production costs.“They were starting to recover before Omicron, and then, as you have all seen, a lot of these performance venues had to shut down again, and those venues are critical for the economy,” the state budget director, Robert Mujica, told reporters.The tax credit program, which began last year under Gov. Andrew Cuomo, was initially capped at $100 million. Early indications are that interest is high: Nearly three dozen productions have told the state they expect to apply, said Matthew Gorton, a spokesman for Empire State Development, the state’s economic development agency.The Hochul administration decided to seek to expand the tax credit program — and to extend the initial application deadline, from Dec. 31, 2022 to June 30, 2023 — as it became clear that Broadway’s recovery from its lengthy pandemic shutdown would be bumpier than expected.Shows began resuming performances last summer, and many were drawing good audiences — Ms. Hochul visited “Chicago” and “Six” in October, while Mr. Gorton saw “The Lehman Trilogy” and “To Kill a Mockingbird.”But the industry is now struggling after a spike in coronavirus cases prompted multiple cancellations over the ordinarily lucrative holiday season, and then attendance plunged. Last week, 66 percent of Broadway seats were occupied, according to the Broadway League; that’s up from 62 percent the previous week, but down from 95 percent during the comparable week before the pandemic.“Clearly, we’re not out of the woods yet,” said Jeff Daniel, who is the chairman of the Broadway League’s Government Relations Committee, as well as co-chief executive of Broadway Across America, which presents touring shows in regional markets. Mr. Daniel, still recovering from his own recent bout of Covid, welcomed the governor’s proposal, and said the League would work to urge the Legislature to approve it.“Every show we can open drives jobs and economic impact,” said Mr. Daniel, who noted the close economic relationship between Broadway and other businesses, including hotels and restaurants. “If we can maximize Broadway, we maximize tourism.”Under the program, shows can receive tax credits to cover up to 25 percent of many production expenditures, including labor. As a condition of the credit, shows must have a state-approved diversity and arts job training program, and take steps to make their productions accessible to low-income New Yorkers. More

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      in Movies

      Netflix Eyes New Jersey Army Base for Major Production Hub

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      The streaming service said it would bid for a nearly 300-acre chunk of Fort Monmouth and it has the support of Gov. Phil Murphy.Netflix wants to turn a crumbling Army base in New Jersey into one of the largest movie and television production hubs in the Northeast, a plan that has at least one important proponent: Gov. Phil Murphy.On Tuesday, Netflix said it would bid for a 289-acre chunk of Fort Monmouth, about 50 miles south of New York City in the boroughs of Oceanport and Eatontown. The 96-year-old base — used by the United States to develop radar technology and where a civilian engineer, Julius Rosenberg, infamously began his espionage career — was closed by the Pentagon in 2011 as the military cut spending.Bids for the site are due Jan. 12, and Netflix would not discuss the price it planned to offer. The Fort Monmouth Economic Revitalization Authority has appraised the site at $54 million, but several developers previously offered more than $100 million for just 89 acres of the land in consideration. (Those plans fell through.) Netflix said in a statement that it would transform Fort Monmouth into a “state-of-the-art production facility,” indicating a mix of soundstages, postproduction buildings and backlot filming areas.“Governor Murphy and the state’s legislative leaders have created a business environment that’s welcomed film and television production back to the state, and we’re excited to submit our bid,” Netflix’s statement said.At nearly 300 acres, the Jersey Shore site would be Netflix’s second-largest production complex behind ABQ Studios in New Mexico. Netflix bought that complex in 2018 and committed to spend $1 billion in the state, announcing plans in 2020 to expand and invest an additional $1 billion. ABQ Studios will have more than 15 soundstages when complete.Gov. Phil Murphy of New Jersey is offering tax credits for production and studio construction.Al Drago for The New York TimesSpeculation about Netflix’s interest in Fort Monmouth has swirled since July, when The Two River Times reported that Netflix had been in contact with Mr. Murphy’s office about building opportunities.New Jersey officials began playing up their state as economically and politically friendly to Netflix in 2019, when a delegation from Mr. Murphy’s administration visited various Hollywood companies in Los Angeles. In April, Mr. Murphy took a swipe at Georgia, which had just passed a law restricting voter access, leading activists, stars and others to demand that companies like Netflix, Disney and Warner Bros. boycott the state. In a letter to all of the major studios, Mr. Murphy highlighted his incentives for the film and television industry — tax credits on up to 30 percent of eligible production costs, on par with Georgia, and “a subsidy for brick and mortar studio development of up to 40 percent.”“I am incredibly excited to hear about Netflix’s proposed investment,” Mr. Murphy said in a statement on Tuesday. “While there is an objective process that any and all applications will have to go through, this is yet more evidence that the economic plan my administration has laid out is working and bringing high-quality, good-paying jobs to our state.”New Jersey has a long relationship with Hollywood. Thomas Edison started what is considered to be the nation’s first film studio in West Orange in 1893. The state’s political winds, however, have not always been favorable to the entertainment industry.Throughout the 2010s, former governor Chris Christie was so disgusted with MTV’s “Jersey Shore” and its depiction of Jersey residents as binge-drinking blowhards that he made sure the state maintained a hard line on providing tax credits to film and television productions. In 2009, when HBO went to find production space for “Boardwalk Empire,” set in Prohibition-era Atlantic City, the network chose to shoot the series in New York, which has long offered tax breaks. “Only New Jersey’s high taxes can make building a replica boardwalk in Brooklyn cheaper than filming on the real Boardwalk in Atlantic City,” a New Jersey state senator railed.In recent years, production in the state has started ramping back up, in part to meet the content needs of fast-growing streaming services. Netflix alone has filmed more than 30 projects in New Jersey since 2018, including “Army of the Dead,” Zack Snyder’s zombies-in-Vegas extravaganza. Coming up, Apple TV+ will shoot “The Greatest Beer Run Ever,” a movie starring Russell Crowe, Zac Efron and Bill Murray. The CBS drama “The Equalizer” has been among the other shows to tape episodes in the state.The CBS drama “The Equalizer,” starring Queen Latifah, is one of many projects to film in New Jersey recently.Barbara Nitke/CBS Entertainment, via Associated PressA Netflix spokesman said the company would continue to shoot in states like New York, Georgia, Massachusetts, Pennsylvania and North Carolina even if the Fort Monmouth plans come to fruition. Last month, the streaming service opened a new 170,000-square foot studio converted from a former steel factory in the Bushwick neighborhood of Brooklyn. The new studio includes six soundstages and office space.On a recent afternoon outside the Bushwick studio, there were half a dozen crew and craft service trucks, as well as a number of crew members milling in and out of the building. Signage around the studio indicated that two series were already in production: “The Watcher,” a Ryan Murphy-produced limited series starring Naomi Watts and Bobby Cannavale, and “Jigsaw,” a new drama. More