Will the New York Music Production Tax Credit Help Your Business? 5 Questions with Ben Allison

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Critically-acclaimed bassist and composer Ben Allison has enjoyed a long and prestigious career these past 25 years or so.

He has been exceptionally active, not only as a musician, but also as a behind-the-scenes organizer, serving as a advisor and facilitator for a number of foundations, even speaking in front of Congress in support of musicians’ rights to intellectual property.

Ben Allison has played Carnegie Hall, written theme songs for NPR programs, and appeared on scores of releases. Recently, he's devoted a portion of his energies to advocating for the New York Music Production Tax Credit as a Vice President of NARAS.

Ben Allison has played Carnegie Hall, written theme songs for NPR programs, and appeared on scores of releases. Recently, he’s devoted a portion of his energies to advocating for the New York Music Production Tax Credit with NARAS.

Most recently, Allison has been serving as Chair of the Advocacy Committee, and now, as President of the New York Chapter for the National Academy of Recording Arts and Sciences (NARAS), an organization probably best known for putting on the annual GRAMMY awards show.

As part of his work with the New York Chapter of NARAS, Allison has been a vocal proponent of the proposed New York Music Production Tax Credit, which just passed a vote in the State Senate this June, and now awaits a signature or veto from Governor Andrew Cuomo.

This bill promises up to $25 million in benefits for music recording projects anywhere in New York State, in the form of a 25%-35% tax credit for qualifying productions. It is based on similar bills that brought targeted tax credits to the film, post-production, theatrical and advertising industries of New York in recent years.

Just who is eligible and for how much? What are the next steps for this bill to become law? Is it a fair deal to have New York’s plumbers, taxi drivers, educators and financiers pay a greater portion of the State’s tax burden so that musicians can pay less? We asked Ben Allison for his take on all this and more.

You were recently in Albany advocating for the New York Music Production Tax Credit. How did you get involved with this initiative, and why did you think it would be a good idea?

A few years ago I joined the board of the New York chapter of the Recording Academy. I’ve served as chair of the Advocacy Committee for the past three years and was recently elected President.

Most people only think of the Recording Academy as the organization behind the Grammys. But the Academy also does great work in the areas of education, supporting musicians in need, music preservation and research and advocacy.

A few years ago, we joined a coalition of music stakeholders, spearheaded by a group called NY is Music because we felt something was wrong with the music industry in New York.

Over the years, we’ve seen huge changes in how people create, sell and consume music. New technologies have both empowered and bewildered artists. The landscape continues to shift in unpredictable ways. To say it’s a challenge for music creators is an understatement.

During the past 10 to 15 years, New York state has lost about 50% of its music production business to other states and cities.

While New York (and especially NYC) still boasts one of the largest and most culturally, stylistically and ethnically diverse community of musicians in the world, it’s also a tough place to do business.

Everyone from indie artists to the top record executives can easily point to examples where the challenges of doing business here have inspired them to look elsewhere. The PROs tell us that many songwriters have left for LA and Nashville. Many artists and producers live here, but record their albums in other states.

What we’ve found is that one of the major drivers of this exodus is cost of production. The Music Production Tax Credit would be a small but significant step towards addressing this by making us more competitive with other states that encourage their music economies with aggressive policies.

The vote on this bill just passed in the State Senate on June 17th. What are the next steps, and what do you think the likelihood is of it becoming law?

It’s been a long process—over two years—since the idea of this credit was first proposed.

We missed the mark last year when it was temporarily woven into an existing program (the Excelsior Jobs Program), which really didn’t work for our industry. So it was especially gratifying to see such overwhelming support for the standalone version of the bill this year.

I think the final tally was 90-20 in the Assembly and 50-2 in the Senate. The next step is to have Governor Cuomo sign. If all goes as we hope, the credit should become available in 2017.

If this bill does become law, what kind of benefit might New York musicians expect?

If the bill becomes law, the next step would be to make everyone aware of it. That’s very important because the success of the program will be measured by how it tangibly affects music production, and by extension, music creators.

The primary benefits are that it provides a total of $25 million in tax credits for music production, starting in 2017.

It does this by providing for a 25% credit for costs incurred within NYC, Long Island, Westchester, Orange, Putnam, Dutchess and Rockland counties, and a 35% credit for costs incurred in other counties.

Eligible costs include studio rental fees and related costs; instrument and equipment rental fees; production session fees for musicians, programmers, engineers and technicians; and mixing and mastering services.

It’s important to note that “above the line” costs, such as fees for featured artists who receive royalties (like Adele, Alicia Keys, etc), producer and songwriter salaries, and licensing fees, are not eligible.

I imagine that there must be some hoops to jump through to qualify for the credit. Who is eligible for the tax credit? And what kind of qualifications, paperwork or other red tape is necessary to claim it?

I saw my role in this process as being the voice of working musicians, so it was very important for me to ensure that the credit would be available to the countless artists and small labels that, when taken together, represent a significant part of our music economy.

The credit would apply to any production with a minimum budget of $7,500 downstate and $3,500 upstate, making it accessible to the vast majority of small and independent creators.

The application process hasn’t been worked out yet, but it likely would be administered by the Empire Development Corp. and involve submitting production budgets and corroborating documentation.

We at the New York Chapter of the Recording Academy would certainly do our part to help artists and small businesses apply to the program once it’s codified. And there are quite a few resources, including service organizations and local music business leagues that would help as well.

I’m sure a lot of our readers will be excited to hear about this development, but I can think of a few potential arguments against it.

What would you say to the critique that these kinds of targeted tax credits are the same kind of handouts or special favors to business that so many musicians rail against when applied to other industries?

The fact is that other states and cities have programs such as this already in place and they’re luring our business away. This credit will help NY to compete. It’s all about creating the positive environment for music to ensure that it remains a vital part of our state’s economy.

This credit is modeled after the York State Film and Television Tax Credit program, which clearly has done a lot to bolster film production in NY.

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  • JB

    This should extend to live performances. Making records is an artistic and economic contribution for sure, but social gatherings around excellent musicianship are cultural lifeblood. The show is where the artist and the listener connect. But increasingly, it’s very challenging to put these shows on with the inherent financial burdens and lack of compensation.

  • Stephen Kurpis

    Depending upon the wording, venues that are incorporating audio multi-tracking & video production may be able to benefit from the credit; but I imagine the venue would have to also fall under the umbrella of a production company laying out the expenses to host the shows. Small’s Jazz club would most likely be a great example as they’ve had an in house label for recording and distribution of live albums alongside low-res video streaming for a few years.

    The more established venues are still following the older model of just booking the artist for the bar draw and letting them worry about the financial benefit of the show; that’s most likely closer to the realm of a particular kind of real estate credit.

  • Sohrab Saadat Ladjevardi
  • Sohrab Saadat Ladjevardi

    Please be aware of a new musician non-profit organization http://www.MusiciansForMusicians.org advocating #MakingMusicIsAProfession.