Current tax codes allow television and film productions to expense up to $15 million in qualified costs, when 75 percent of compensation paid is for services performed in the United States, according to a release from the New York State Senator's office.
Broadway shows and other live theatrical productions do not currently qualify for the tax incentive. Schumer's proposed amendment would extend the same benefits to live theatre investors. This tax break allows film and television studios the opportunity to immediately recoup their investments prior to taxes being assessed on profits earned.
With a majority of Broadway shows closing before they recoup their investments, Schumer and industry leaders are hopeful that the tax incentive will entice more investors to finance live theatrical productions.
Schumer's proposal, which will be included in a tax bill that will be considered for a full vote by the New York State Senate in the coming weeks, will allow 100 percent of an investment to be deducted by the investor from his or her income in the year of the investment.
The announcement of Schumer's proposed amendment comes just days after the New York State Senate approved a 25 percent tax credit that will offer financial incentives for live theatrical productions to originate in New York State. Read about the legislation here. Schumer made the announcement April 7 at an event at Sardi's alongside Broadway producer Harvey Weinstein and Nick Scandalios, chairman of The Broadway League and executive vice president of the Nederlander Organization, in addition to actors Neil Patrick Harris, Bryan Cranston, Tyne Daly, and cast members from The Phantom of the Opera, Newsies and Cinderella.
"Standing with this uncommon cast of characters, I'm making a final push to strengthen the very fiber of New York's being: Broadway and live theatre,” Schumer said in a statement. "This plan, which would eliminate a double standard when it comes to taxing the entertainment industry, will mean more shows on Broadway, more jobs and more investment in-and-around the Great White Way. Culture and entertainment is one of America's great economic drivers and investing in live theatre is absolutely fundamental to the nurturing and growth of this critical sector of our national economy. As an integral part of the entertainment industry, live theatre must be offered the same federal tax incentives as those afforded to television and film productions, so that investment in commercial stage production does not get pushed abroad. I am urging my colleagues to get this plan over the finish line and give its regards to Broadway!"