The Broadway tax credit returned after the money ran out late last year.
As part of the recently passed New York state budget, New York Governor Kathy Hochul allocated an additional $150 million to the tax credit program, which began in 2021 and has been allocating about $100 million to Broadway and off-Broadway productions annually. The $150 million covers productions that had their first paid performance starting Dec. 1, and retroactively covers those who may have missed out on the tax credit during the funding gap, as well as those who had their first public performances during the rest of the year.
This is good news because many productions have already built a tax credit of up to $3 million per Broadway production into their budgets. Producers say it has become an important talking point when convincing investors to put money into the show, because it allows commercial productions to subsidize 25 percent of production costs and provides an easier path to compensation.
The Broadway League, the trade association for Broadway producers and general managers, had been lobbying for the tax credit to be reinstated once the industry realized the credit might run out of money last summer. Association members had a feeling the credit would be included in the budget, which was signed into law on May 28, and the plan is to keep pushing for the credit to be included going forward.
The credit was issued as a means of post-pandemic recovery, and there were those who viewed it as a tax credit to address these special circumstances. According to the original legislation, the credit is set to expire in 2027. But the hope is that it will become a permanent part of the budget going forward, in the same way as movie and TV credits.
“We’re not a special case, we’re not an industry that’s asking for it or something that no other industry is getting, that’s kind of been our argument with state lawmakers,” said Cody Lassen, a Broadway producer and member of the association’s government relations committee. “We’ve been doing it for film and TV. All we’re asking is: ‘Can you consider us part of this tax credit package?’
But there has also been a decline in credit, which was given to already high-grossing shows including The lion king, evil and Music manIn addition to offers for those in need. Jeff T. Daniel, president of the Shubert Organization and chairman of the league’s Government Affairs Committee, was among those who previously suggested that financially successful shows should return some of the credit. This has not really been achieved yet.
“I think there’s still a bigger debate about which offers should be eligible, and which offers should get the full amount, but I don’t think there’s a solution that will ever satisfy anyone,” Lassen said.
However, recovery is a difficult milestone to reach, as only a handful of performances have been recovered from this season so far, with those being limited to star plays. Compensation for musicals is becoming rarer Just in timerecently reached this milestone as the only musical from the 2024-2025 season to announce its recovery, and one of the few in recent years to reach this milestone, including Strangers (from the 2024-25 season), six (2021-22) MJ (2021-22) And Juliet and Moulin Rouge!
“The Musical and Theatrical Production Tax Credit is essential to Broadway’s ability to create good-paying jobs, attract investment and tourism to New York, and deliver unforgettable experiences for audiences around the world. As production costs rise and competition intensifies, expanding this tax credit will help ensure Broadway’s economic impact — including those jobs, investment, and millions of dollars in tourism spending — remains strong. We are grateful to Governor Hochul, Majority Leader Stuart Cousins, Speaker Heastie, and Broadway League President Jason Lacks. “We thank you for this expansion and helping to protect the future of Broadway in New York.”
