Tax credit program deemed a resounding success for Broadway producers' business, yet a dismal failure for number crunchers, promised a revival in fight.
In the heart of New York City, the Broadway League, an organization of theater professionals, is advocating for additional funding for a tax credit designed to support the city's iconic productions. The New York City Musical and Theatrical Production Tax Credit, launched in 2020, has been a crucial financial incentive for Broadway shows, providing a 25% refundable tax credit on approved production costs with caps of $3 million for Broadway shows and $350,000 for Off-Broadway productions [1][2].
However, the tax credit funding has nearly been exhausted, with the original $400 million allocation running out earlier than expected due to higher than usual demand and the high costs of shows. The New York State Empire State Development (ESD), which administers the credit, projects that the full funding pool may be used up this year, leaving some eligible productions without credits [1][2][4].
In response, the Broadway League is urging the New York State Legislature and Governor to increase funding for the current year, potentially retroactively, and extend funding for at least three more years to offer stability for future productions. The League also proposes introducing a repayment mechanism for very successful shows to return a portion of credits, aiming to better allocate funds across multiple productions [1][2].
The 2025–26 New York State Executive Budget also proposed extending the credit for two additional years through 2027 and boosting the aggregate fund from $300 million to $400 million annually. This would maintain and expand support for productions amid financial pressures but faces challenges given the state's broader budget deficit—estimated at $7.5 billion for the next fiscal year [3][2].
The success of the 2021 Broadway season, which saw 43 new productions, nearly $1.9 billion in gross revenue, nearly 14.7 million attendees, and over 1,710 weeks of shows, is attributed in part to the state's continued funding of the tax credit program [5]. The tax credit supports the entertainment industry and boosts tourism in the city, covering production costs for sets, costumes, wardrobes, makeup, accessories, sound, lighting, and staging, as well as half of advertising and marketing costs in New York State [1][2].
Jason Laks, President of the Broadway League, emphasizes the importance of sustaining the tax credit as it helps fund an industry that employs tens of thousands of workers. State Sen. Brad Hoylman-Sigal, who represents the Theater District, views the tax credit as a crucial subsidy for the Broadway industry [2]. The tax credit encourages investment and fuels the industry's growth, making it a valuable tool in maintaining New York City's status as a global entertainment hub [1][2].
It's worth noting that not all performances are eligible for funding under the credit program. Ballet, opera, musical solo, group, band or orchestra performances, or stand-up comedy performances do not qualify [1]. Broadway shows eligible for the credit must be in the Theater District, bounded by 41st and 54th Streets between 6th and 9th Avenues [1].
As the Broadway community faces rising costs, including inflation, the tax credit remains a vital source of support. The Broadway League's advocacy for increased and prolonged funding, along with potential structural adjustments, aims to ensure sustainability and equitable distribution of funds for the industry's continued success.
[1] Broadway League. (2022). Tax Incentives. Retrieved from https://www.broadwayleague.com/tax-incentives/
[2] New York State Empire State Development. (2022). New York City Musical and Theatrical Production Tax Credit. Retrieved from https://esd.ny.gov/programs/new-york-city-musical-and-theatrical-production-tax-credit
[3] New York State Executive Budget. (2022). Executive Budget Briefing Book. Retrieved from https://www.budget.ny.gov/budget/2025-26/ebb/
[4] New York State Empire State Development. (2022). New York City Musical and Theatrical Production Tax Credit – Frequently Asked Questions. Retrieved from https://esd.ny.gov/programs/new-york-city-musical-and-theatrical-production-tax-credit-frequently-asked-questions
[5] Broadway League. (2022). 2021-2022 Broadway Recap. Retrieved from https://www.broadwayleague.com/research/2021-2022-broadway-recap/
- In light of the success of the Broadway industry, the Broadway League is advocating for an increase in funding for the New York City Musical and Theatrical Production Tax Credit, as it serves as a significant financial incentive for both business and entertainment sectors.
- The extant funding of the tax credit has been insufficient to support the high costs of Broadway shows, sparking a call for prolonged funding to sustain the growth and employment opportunities in the finance, business, and entertainment industries.
