New York Enacts Tax Credit for Digital Game Developers

July 12, 2022

By: Jess Johannesen, SALT Senior Manager

At a glance

  • The main takeaway: New York has big hopes that a new tax credit, the Empire State Digital Gaming Media Production Credit, will be enough to incentivize the production of gaming media in the state when it goes into effect on January 1, 2023.
  • Assess the impact: As with any tax provision, there are several nuances that should be considered first to help you fully understand the rules and eligibility to maximize and claim this potential tax credit.
  • Take the next step: Aprio’s State and Local Tax (SALT) team can help determine if your business is eligible to receive this new tax credit before it becomes effective next year.

Schedule a free consultation today to learn more!

The full story:

Governor Kathy Hochul signed New York’s Fiscal 2022-2023 budget in April (S8009C), and this bill established a new tax credit to incentivize production of digital gaming media in New York.[1] The Empire State Digital Gaming Media Production Credit (the New York Gaming Tax Credit) becomes effective for tax years beginning on or after January 1, 2023, and it will sunset for tax years beginning on or after January 1, 2028. 

The New York Gaming Tax Credit shares some similarities to Georgia’s Gaming Tax Credit, and the table below provides a high-level summary of the two.[2]

New York Gaming Tax CreditGeorgia Gaming Tax Credit
Base Tax Credit Rate25%20%
Additional Tax Credit Rate10% (for eligible costs incurred outside of the Metro Commuter Transportation District)10% (for use of Georgia’s Peach Logo in the approved production)
Annual Statewide Credit Available$5 million$12.5 million
Annual Tax Credit Limit per Production Company$1.5 million$1.5 million
Ways to Use the Tax CreditOffset New York Income tax liability (still owe fixed dollar minimum if subject to the tax).
Any remainder is credited or refunded to the taxpayer.
Offset up to 100% of Georgia income tax liability (excess carried forward up to 5 years)
Elect to apply to Georgia withholding tax
Transferable to other Georgia taxpayers

How the New York and Georgia Tax Credits apply to production expenditures

New York’s Gaming Tax Credit applies to production costs for the use of property or performance of services in New York that are directly and predominately attributable to the creation, production or modification of certain types of productions. These productions generally include specific websites, internet-based or mobile games, and other video game software intended for commercial distribution. In addition, for any eligible production, more than 75% of the total production costs must be attributable to New York.

Georgia’s Gaming Tax Credit similarly applies to production expenditures that are directly used in the production of an interactive system that creates a computer-controlled environment where users can play to achieve a goal that is determined by a player’s skill and/or luck. These types of interactive entertainment productions generally include PC games, console games, mobile games and extended reality, such as virtual reality, augmented reality or mixed reality. 

Both New York’s and Georgia’s Gaming Tax Credits exclude expenditures related to certain types of activities such as distribution, marketing and advertising (even if such expenditures are incurred in the state). New York’s Gaming Tax Credit also excludes certain costs used in the calculation of other New York tax credits. Georgia has a similar provision that is specific to certain types of state tax credits.

In order to be eligible for New York’s Gaming Tax Credit, the taxpayer can be an entity or an individual as long as the taxpayer is merely engaged in development of qualified digital development media production. For purposes of the Georgia Gaming Tax Credit, an entity must:

  1. Have a physical location in Georgia,
  2. Have at least $250,000 of Georgia payroll for the tax year,
  3. Have a gross income less than $100 million for the tax year and
  4. Be primarily engaged in qualified game development activities. 

The bottom line

There are several other nuances related to these tax credits that game developers in either Georgia or New York need to consider. Aprio has experience assisting Georgia gaming companies in structuring operations to become eligible for the tax credit, understanding the rules to maximize the potential tax credit, and ultimately securing and claiming the tax credits. We can provide similar assistance for game developers looking to capitalize on this new credit in New York. 

As New York’s Gaming Tax Credit becomes effective next year, connect with Aprio’s SALT team to help your business understand and benefit from these new tax incentives. We constantly monitor these and other important state tax topics, and we will include any significant developments in future issues of the Aprio SALT Newsletter. 

Contact Jess Johannesen, SALT Senior Manager at or Jeff Glickman, partner-in-charge of Aprio’s SALT practice, at for more information.

This article was featured in the June 2022 SALT Newsletter

[1] Please refer to Part OO of New York Senate Bill S8009C for the complete tax credit legislation.

[2] It is worth noting that when Georgia first enacted its gaming tax credit, the credit was also scheduled to sunset after a 5-year period. However, this sunset provision was ultimately removed as the credit gained traction and provided significant benefits to Georgia’s economy through the game developers that established business in the state. It will be interesting to see if New York’s credit has a similar impact.


Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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About the Author

Jeff Glickman

Jeff Glickman is the partner-in-charge of Aprio, LLP’s State and Local Tax (SALT) practice. He has over 18 years of SALT consulting experience, advising domestic and international companies in all industries on minimizing their multistate liabilities and risks. He puts cash back into his clients’ businesses by identifying their eligibility for and assisting them in claiming various tax credits, including jobs/investment, retraining, and film/entertainment tax credits. Jeff also maintains a multistate administrative tax dispute and negotiations practice, including obtaining private letter rulings, preparing and negotiating voluntary disclosure agreements, pursuing refund claims, and assisting clients during audits.

(770) 353-4791