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Harvey Weinstein’s fall from grace could have a significant impact on the millions of dollars in tax incentives that New York hands out to the film industry and other companies.
Legislation is being drafted that would prohibit any company doing business in the state from receiving state or New York City tax breaks if it knew or should have known about sexual harassment and failed to respond.
“New York must have a zero tolerance policy toward sexual assault and harassment,” New York State Assemblymember Linda B. Rosenthal (D), sponsor of the proposed measure, said in an Oct. 17 statement. “Companies that hide sexual assault or discrimination will no longer receive taxpayer funded benefits.”
Rosenthal’s proposed legislation is supported by Gov. Andrew M. Cuomo (D), according to his press secretary, Dani Lever.
“We support this reform and look forward to working with Assembly Member Rosenthal to make this a reality,” she told Bloomberg Tax in an Oct. 18 email.
“This reprehensible behavior goes beyond the film industry and we need to look at ways to weed it out across the board,” she said. “We are looking at broad-based reforms in this arena and are examining what can be implemented administratively and what will require legislation.”
Under Rosenthal’s proposed bill, which is expected to be introduced shortly, tax credits would be banned for any company, its parent, any of its subsidiaries, or its principals if they knew or should have known about sexual harassment, discrimination, or general harassment and took no action to stop it.
The bill would cover tax credits across all industries and property tax abatements, Rosenthal said.
Companies would be required to disclose its sexual harassment policy and the number, type, and disposition of sexual assault, harassment, or discrimination cases involving their employees within the previous five years, as part of their applications for tax breaks.
New York hands out $420 million in film tax credits each year to lure the film and television industry to the state. The program, which has been criticized by some on the left and the right, is one of the most generous among states.
A Bloomberg Tax examination of the credits found that The Weinstein Company received $4.5 million in tax credits in 2016 for production of the movie “St. Vincent.” Neither the company nor Miramax, the company Weinstein founded, appear on any other quarterly reports from the state Empire State Development agency over the past two years.
To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com
To contact the editor responsible for this story: Jennifer McLoughlin at firstname.lastname@example.org
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