A group of musicians concerned about the music industry in New York are now encouraging State Legislature to make some changes. Their proposed bill would give $60 million in annual tax breaks to record companies, studios, and other creators involved in music production.
“The epicenter of the global music industry was New York, for as long as anyone can remember, and now that’s slipping away,” said Justin Kalifowitz, chief executive of Downtown Music Publishing. “That’s something we have to stop.” Kalifowitz is also a co-founder of New York is Music, a coalition supporting the new proposal.
The plan may seem like wishful thinking, but it actually draws from a program that is already in place for New York companies involved in film and television production. This $420 million tax credit program, which was introduced in 2004, has been instrumental in the growth of that industry over the past decade, benefitting the city in the process. A 2012 study by the Motion Picture Association of America (MPAA) found that in-state spending grew from $600 million in 2004 to $1.5 million in 2011.
Local music figures have taken note, and feel tax subsidies would prove to be a similar catalyst for their industry. If the bill were to pass, New York businesses would receive a 20 percent credit on any expense related to the production of music. A central goal is to support “below the line” workers like graphic designers and studio engineers.
“Billy Joel is not going to get a tax credit, nor is Jay Z. It’s going to be the working stiff that gets the credit,” said Joseph R. Lentol, the Democratic assemblyman who introduced a draft bill for the music tax credit in February.
It has long been debated whether tax credits like these are effective in creative industries, an argument that falls under the broader issue of the inherent nonneutrality of industry-specific tax incentives. Some states have greatly reduced entertainment tax subsidies in recent years. However, many local music professionals feel that both the city and the creators would benefit from the change. “The hope over the long term,” said Kalifowitz, “is to build a diverse and viable music industry ecosystem across the state.”