The state's film production tax credit never applied to talk shows because the productions are too small to employ enough people to justify the tax break. However, at one point, the subsidy did apply to variety shows. Therefore, some talk shows were reclassified as variety shows to receive the tax break.
Supporters of the proposed legislation, including the bill's sponsor, Democratic Senator Brad Hoylman, argued that Shepherd's show is a continuation of Wendy Williams' New York-based show, which did receive the state's tax credit.
Since then, the state's film production tax credit no longer applies to variety shows, but Williams' show was "grandfathered in" since it applied for the tax break before the new rule was enacted.
The bill's supporters claimed Shepherd's show should be considered a continuation of Williams' because it is filmed in the same location and retained at least 80% of the staff.
The Empire State Development agency, which oversees the tax credit, told the New York Post that since Shepherd's show has a different name, host, and marketing and advertising material, it "is a new variety show which is now legally excluded from the program."
According to ESP, the show "has already filmed over 50 episodes w/o receiving a tax credit."
The subsidy is a "25% tax credit on qualified costs incurred in New York State for eligible productions. There are no caps for potential benefit for this credit."
Annually, the ESP provides approximately $420 million in tax credits to the film and TV industry in New York.
Supporters fear that, if the show does not receive a tax credit, the production will move out of state to Los Angeles, California, resulting in less "diversity" in New York media.
Assemblywoman Michaelle Solages, chairwoman of the Black, Hispanic, and Asian Legislative Caucus, wrote in a letter to Hochul, "If we allow the Sherri Shepherd show to leave New York, what message are we sending to the diverse audience that supports it?"
"Surely, we want people to recognize that New York did everything it could to keep this woman of color in New York," Solages added. "Absent the receipt of the credit it is highly likely that this show will be transferred to Los Angeles for production. We must not let that happen."
Critics of the bill do not believe that major productions like Shepherd's need a tax break from the state.
John Kaehny, director of the government watchdog group Reinvent Albany, told the Post, "How about spending our state taxes on schools, clean water and subways instead of Hollywood producers and millionaire TV stars?"
"The Tonight Show with Jimmy Fallon got $24 million in state money in 2021. Why does Jimmy Fallon deserve state handouts more than Sherri Shepherd or any other new show? He doesn't — none of these variety shows should be funded by state taxpayers. The State should pass a new law ending this highly politicized and wasteful subsidy — not pass new laws benefiting one variety show," Kaehny continued.
The bill passed both state legislative houses and currently awaits Hochul's decision.
A spokesperson for the governor stated, "Governor Hochul is reviewing the legislation."