On Jan. 21, New York governor Kathy Hochul released her executive budget for the 2026 fiscal year. Among the items in the $252 billion budget Hochul proposed is an expansion and extension of the New York City Musical and Theatrical Production Tax Credit.
Known colloquially as the downstate tax credit, the New York City Musical and Theatrical Production Tax Credit is a measure first introduced in the 2021 state budget to assist the theatrical industry, including Broadway, as it emerged from the pandemic.
At that time, the credit accounted for a total allotment of $100 million to distribute to commercial productions in New York City. The program allowed productions to apply for a tax credit. Approved productions could use the credit to cover costs incurred in the 12 weeks before the first paid public performance. The up to $3 million in covered costs can include the design and construction of sets, all salaries and payroll items up to $200,000 a week, technical and crew production costs and up to 50 percent of advertising and marketing costs in New York. There is a longtime tax credit like this for New York theaters outside the city (colloquially called the upstate tax credit), but the passage of this particular program marked the first of its kind for Broadway. The program was intended to last until 2023.
But, in 2023, Hochul renewed the program until June 30, 2025, and expanded the total allotment to $300 million. Hochul’s latest budget proposes an extension of the program until 2027. The governor also increased the annual allocation from $300 million to $400 million.
Inclusion in the executive budget does not mean the program has been extended or expanded — yet. Hochul’s executive budget will form the basis of negotiations with the state legislature ahead of an April 1 deadline.
