Broadway producers are planning to advocate for an extension of a state tax credit program that ran out of money, with some planned tweaks, including a repayment plan for successful shows.
The Broadway League, a trade association of producers and general managers, will soon be advocating for a three-year extension of the NYC Musical and Theatrical Production Tax Credit that maintains the funding level of $100 million per year. One key change this time will be asking shows that end up being financially successful to give back a portion of the credit.
“The intent of [the tax credit] was to incentivize our investors and our shows to take the risk, which is a crazy, great risk, to open a show on Broadway. But they’re quite happy when they are successful. And I think most everyone believes it’s reasonable to say, ‘Great, I shouldn’t get the full allocation, that should go back in the kitty for other shows and more economic development,” said Jeff T. Daniel, president of the Shubert Organization and chair of the League’s Government Affairs Committee.
The other key ask will be getting funding for the shows that will not receive the credit this year due to funds running out more quickly than expected.
Starting 2021, as part of post-pandemic recovery the industry, NYC Musical and Theatrical Production Tax Credit allowed commercial productions to subsidize 25 percent of their production costs, totaling up to $3 million per Broadway production or up to $350,000 per Off-Broadway production.
The program operates at a run rate of about $100 million per year, but as of mid July, the Empire State Development Fund, which runs the program, said about $365 million of the $400 million program funding total had already been allocated. With some applications already pending, the program also said it will not accept applications for productions with a first paid performance after Sept. 15, 2025.
The Broadway League held an emergency meeting on the topic earlier this month as producers worried about their ability to attract future investment.
While it’s been a boon for Broadway’s recovery, the program has also faced criticism as blockbusters such as The Lion King, Wicked and the Hugh Jackman-led Music Man received the tax credit. The program already had a repayment mechanism in place, which required productions to repay up to half their grants to the New York State Council on the Arts if they met a certain box office threshold, but no production has yet had to repay the grant. (A few productions hit the metric early on in the program, but closed early and did not receive the tax credit, Daniel said.)
Daniel added that that original calculation for repayment was incorrect because the industry did not expect production costs to be so high post-Covid. Repayment currently requires hitting quarterly box office sales that are double operating expenses.
Tax credits ran out quickly this year, both due to demand, and as productions had been conditionally approved for the credit before the $100 million was signed into law. This meant that there was already a line of shows ready to receive the funding once it was approved in May, and it went quickly.
“When the budget passed on May 8, 2025, adding another $100M to the program, all conditionally accepted applications became eligible for the additional funding,” a spokesperson for Empire State Development Fund said.
Rather than asking to increase the funding amount in future legislation, Daniel said the League is sticking with the $100 million per year. This amount was stipulated in the original legislation as the run rate to maintain Broadway’s $15 billion of economic impact. The belief is this will be sustainable if successful productions have to pay back part of their credit in the future.
It’s also a strategy to help extend the program as New York faces a big budget deficit heading into next year.
The program was initiated in 2021 under Gov. Andrew M. Cuomo, with $100 million in funding, and extended under Gov. Kathy Hochul, who most recently approved the $100 million to funding in May as part of the 2026 state budget.
But this time around, New York is contending with federal spending cuts that were passed as part of President Donald Trump’s One Big Beautiful Bill. New York’s state budget is expected to take a $750 million hit this fiscal year due to Medicaid cuts and $3 billion hit next fiscal year, on top of its already projected $7.5 billion deficit for that year. Any tax credit renewal would be balanced against those needs.
Daniel acknowledges the tough environment, but that’s already part of the calculation.
“Those are headwinds, and it’s up to us to say, ‘Look, we’re not asking for the length of time or money that’s in the film credit.’ We want to maintain and self-manage as a good partner, the economic development we have, the impact we have on tourism in a responsible way, so that it’s easily defendable,” Daniel said.
Negotiations for the next state budget will start in January, and the budget is typically signed into law in April or May.
The Broadway League has already begun its lobbying efforts ahead of the January negotiations, and tthe Off-Broadway League also plans to advocate for the extension of the credit. If the credit is not renewed, Joey Monda, president of the Off-Broadway League, said it would be “extraordinarily damaging.”
“It would really disincentivize producers and investors from participating in the commercial Off-Broadway scene,” Monda said. “This is one of the very few ways that we have to mitigate risk in a very, very risky model.”
State Sen. Brad Hoylman-Sigal, who won the recent Democratic primary for Manhattan borough president, has said he would advocate for a renewal of the tax credit next year, assuming he wins the general election in November. But he’s also been rethinking how the credit should be allocated, particularly around the scheduling of when its handed out.
“It’s a crucial subsidy by the state of New York to one of our home-grown industries, Broadway,” Hoylman-Sigal said. “I would liken it to price supports for the dairy industry in Wisconsin, it’s that essential.”
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