Tuesday, June 7, 2016

NY Tax Credit = More Music, More Jobs

Written by Robert Lindquist — In New York State, the Excelsior Jobs Program was created to provide tax credits for strategic high tech, bio-tech, clean-tech and manufacturing businesses—and last year, the legislature added “music production firms” as an eligible industry. While the addition recognized the strategic importance of the music industry in creating high-quality jobs, Excelsior was not built to support industries like music production and recording. As a result, in its current form, no music production firms have applied for the credit. To rectify the situation, a version of a bill to adapt Excelsior to better reflect the music industry passed the State Assembly last year, but was never voted on by the State Senate.

This past March, the Empire State Music Production Tax Credit, a standalone bill, was introduced in the state legislature. The purpose of this tax credit–similar to the state’s tax credit for film companies– is specifically to lighten the financial burden for studio operators and music production companies, including the salaries of session musicians. With this tax credit, the State is hoping to create more opportunities for music production companies and studio operators to expand, create more projects and hire more musicians.

On Wednesday, June 1st, New York Is Music, a coalition of more than 200 music-related organizations gathered in Rochester, NY and GCR Audio Recording Studio in Buffalo to call on the State Senate and Governor Andrew Cuomo to pass the Empire State Music Production Tax Credit. The rally continued at Big Blue North recording studio in Utica, NY on Thursday. The group will head to Albany next week.

Speaking before the rally, Justin Kalifowitz, co-founder of New York is Music and CEO of Downtown Music Publishing, said, “More than 100,000 New Yorkers work in music but their job opportunities are dwindling as cities like Toronto, Los Angeles, and Nashville line up to offer new incentives and recruit entrepreneurs in the industry. We urge the legislature to enact this bill and support New York’s talented and diverse music workforce.”

Local supporters who took to the mic included: Tony Gross, President of GFI Productions in Ontario, NY; Justin Rose, head engineer at GCR Audio Recording Studio in Buffalo; and Pam Jardieu, studio manager of Big Blue North Recording Studio in Utica; Tino Gagliardi, President of the Associated Musicians of Greater New York (Local 802 AFM); David Angus, President of the American Federation of Musicians (Local 66); Ben Allison, President of The Recording Academy New York Chapter; and Tim Clark, Film Commissioner of the Buffalo Niagara Film Commission.

Gross told the crowd, “Much of the infrastructure that made New York the pinnacle of the music industry still exists. The Empire State Music Production Tax credit may be the economic stimulus we need to start on that path again.”

Justin Rose followed with, “Coming from the engineering standpoint, working with a team of dedicated professionals, I know the tax incentives would be a big plus. It would help out tremendously on a day to day level.”

For decades, New York was the center of global music production, but the State’s share of the industry has drastically declined in recent decades. In the New York City metropolitan area, a rising real estate market and other financial pressures have caused many of the most storied and successful studios to pack it up or pack it in. Upstate, the industry has lacked collective exposure. Meanwhile, efforts by Toronto, Los Angeles, New Orleans and Nashville, as well as foreign countries, have lured the industry away from New York.

“New York is a great place to live but let’s face it, it’s very expensive to do business here,” said Pam Jardieu, “The music production tax credit helps to level the playing field and allows our small business to compete fairly against places like Los Angeles and Nashville that already have this powerful incentive in place.”

The bill will provide a 25 percent tax credit for eligible production-related costs for Downstate (NYC Metro) music businesses and a 35 percent tax credit for production-related costs for Upstate music businesses, similar to the State’s film tax credit. To be eligible, costs must be related to job creation, including studio rental fees; instrument and equipment rental fees; production session fees for musicians, programmers, engineers, and technicians; mixing and mastering services; local transportation; expenditures directly related to music production and provided at or to the site for the production of music videos. The program is capped at $25 million per year.

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