Studio Act
Qualified Cultural Studio Use
NEW YORK
STATE BILL
Proposed Amendment to
Real Property Tax Law §420-a
Prepared for consideration by
Senator Erik Bottcher
47th Senate District
This proposed amendment would recognize qualifying artist studios operated as part of a nonprofit cultural program as exempt-purpose use under New York State law. It would also allow artists already occupying those studios to remain under existing agreements, subject to qualifying artistic use and program oversight.
STATE OF NEW YORK
S. __________
20____–20____ Regular Sessions
IN SENATE
______________, 20____
Introduced by Sen. __________ — read twice and ordered printed, and when printed to be committed to the Committee on __________.
AN ACT
to amend the real property tax law, in relation to
qualified cultural studio use
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Section 420-a of the real property tax law is amended by adding a new subdivision ______ to read as follows:
______. Qualified cultural studio use. (a) For purposes of this section, a portion of real property owned by a corporation or association described in subdivision one of this section and operated by the owner as artist studio space through a bona fide cultural studio program shall be deemed used exclusively for carrying out the owner’s exempt purposes, provided that such portion is actually and primarily used by participating artists for the creation or production of art. Such use shall not cease to qualify solely because a participating artist sells or receives income from work created in the space.
(b) For purposes of this subdivision, “bona fide cultural studio program” means a program operated in furtherance of the owner’s exempt purposes that: (i) provides and administers studio space under written program standards; (ii) maintains programmatic oversight sufficient to verify continued qualifying artistic use; (iii) provides one or more cultural, educational, professional-development, shared-facility, public-access, or other services reasonably related to artistic production; and (iv) for new and renewed occupancies, establishes charges under a written policy reasonably designed to preserve affordability or otherwise advance the program’s exempt purposes. Artists admitted after the program commencement date shall be admitted under written eligibility or selection criteria reasonably related to the program’s exempt purposes.
(c) A participating artist, directly or through an entity owned or controlled by the artist and used for the artist’s practice, may occupy qualifying studio space under a lease, license, membership agreement, or other occupancy agreement. An artist occupying such space under an agreement in effect on the program commencement date may become a participating artist without reapplication and without termination or material economic modification of that agreement, provided the artist agrees in writing to qualifying artistic use and program oversight. Such agreement may remain in effect for the balance of its then-current term, including any renewal option held by the artist or artist-controlled entity on the program commencement date; any new extension or renewal granted thereafter shall be subject to written program terms consistent with this subdivision.
(d) For purposes of this subdivision, “program commencement date” means the date on which a qualifying owner acquires the property and establishes the program or, for property already owned by such corporation or association, the date its governing body formally establishes the program. This subdivision shall not apply to any portion of real property used primarily for residential purposes, retail sales, commercial gallery operations, or other activity unrelated to artistic production.
§ 2. This act shall take effect immediately and shall apply to assessment rolls prepared on the basis of taxable status dates occurring on or after such effective date.
EXPLANATION—Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted.
NEW YORK
STATE SENATE
RESOLUTION
Memorializing Congress to Amend
Internal Revenue Code §145
and Requesting Guidance
from the U.S. Treasury
This proposed New York State Senate resolution grew out of the effort to preserve the Wolff Portfolio and the federal financing obstacle encountered in attempting to bring its occupied artist studios under nonprofit cultural stewardship.
It calls upon Congress to amend Section 145 of the Internal Revenue Code so that qualifying artist studio use within a nonprofit cultural program would not be classified as private business use. It also asks the U.S. Treasury to determine whether comparable guidance is possible under existing law.
The resolution forms part of the Qualified Cultural Studio Use legislative proposal submitted to Senator Erik Bottcher’s office in September 2026. It is under review and has not yet been introduced or adopted.
Senate Resolution No. __________
BY: Senator ______________
MEMORIALIZING the Congress of the United States to amend Section 145 of the Internal Revenue Code to recognize artist studio space operated by nonprofit organizations as use in furtherance of their exempt purposes, and requesting the Secretary of the Treasury to determine whether existing authority permits administrative guidance to the same effect
WHEREAS, The cultural life of New York State depends not only on institutions that present art to the public but also on the sustained production of art in studios; and
WHEREAS, New York’s Arts and Cultural Affairs Law expressly includes artists’ and dancers’ studios among cultural facilities that may be operated or made available by participating cultural institutions through the Trust for Cultural Resources of the City of New York; and
WHEREAS, The Trust may issue bonds to finance qualifying cultural facilities, but federal tax law determines whether such bonds qualify for tax-exempt treatment; and
WHEREAS, Section 145 of the Internal Revenue Code modifies the private-business-use and private-security-or-payment tests of Section 141 for qualified 501(c)(3) bonds by substituting a five percent threshold for the ordinary ten percent threshold; and
WHEREAS, Treasury Regulation §1.141-3 generally treats the lease of bond-financed property to a nongovernmental person as private business use; and
WHEREAS, In 2025, a nonprofit preservation effort sought to acquire the West Chelsea Arts Building in Manhattan, home to approximately 200 artist studios, under nonprofit cultural stewardship without displacing the existing artists, and bond counsel concluded that the artists’ occupancy would cause the five percent private-use limit to be violated “from the outset”; and
WHEREAS, A narrow federal rule treating qualifying artist studio use within a bona fide 501(c)(3) cultural program as the organization’s own exempt use would allow an occupied studio building to transition to nonprofit stewardship without requiring artists to vacate merely to preserve bond eligibility; now, therefore, be it
RESOLVED, That this Legislative Body pause in its deliberations to memorialize the Congress of the United States to amend Section 145 of the Internal Revenue Code so that use of qualifying studio space by participating artists for the creation or production of art as part of a bona fide cultural studio program of a 501(c)(3) organization is treated as use by that organization in furtherance of its exempt purposes and not as private business use, including during a limited transition for leases in effect when such program begins; and be it further
RESOLVED, That this Legislative Body request the Secretary of the Treasury to determine whether existing statutory authority permits an administrative safe harbor addressing the same transition problem and, if so, to issue appropriate guidance; and be it further
RESOLVED, That copies of this Resolution, suitably engrossed, be transmitted to the President of the United States Senate, the Speaker of the United States House of Representatives, the Chair and Ranking Member of the House Committee on Ways and Means, the Chair and Ranking Member of the Senate Committee on Finance, each member of the New York State Congressional Delegation, and the Secretary of the Treasury.
UNITED STATES
HOUSE BILL
Proposed Amendment to
Internal Revenue Code §145
This proposed bill sets out the federal amendment that the New York State Senate resolution asks Congress to make. It would add a new subsection to Section 145 of the Internal Revenue Code so that artist studio use within a nonprofit cultural program is treated as the organization’s own exempt use, with a transition for artists already in place.
Only Congress can enact it. To become law, it would be introduced by a member of the House of Representatives, considered by the Committee on Ways and Means, passed by both houses, and signed by the President.
The federal text forms part of the Qualified Cultural Studio Use legislative proposal submitted to Senator Erik Bottcher’s office in September 2026.
I ______ CONGRESS H. R. ________
______ SESSION
To amend the Internal Revenue Code of 1986 to treat the use of qualified cultural studio space by participating artists as use by the 501(c)(3) organization that owns the property, and not as private business use.
IN THE HOUSE OF REPRESENTATIVES
______________, 20____
______________ introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to treat the use of qualified cultural studio space by participating artists as use by the 501(c)(3) organization that owns the property, and not as private business use.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Qualified Cultural Studio Use Act”.
SEC. 2. QUALIFIED CULTURAL STUDIO USE.
(a) IN GENERAL.—Section 145 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(____) QUALIFIED CULTURAL STUDIO USE.—
“(1) IN GENERAL.—For purposes of subsection (a)(2) and section 141(b), use of qualified cultural studio space by a participating artist shall be treated as use by the 501(c)(3) organization that owns the property in an activity that is not an unrelated trade or business and shall not be treated as private business use solely by reason of the artist’s occupancy or artistic activity.
“(2) QUALIFIED CULTURAL STUDIO SPACE.—The term ‘qualified cultural studio space’ means studio space actually and primarily used for the creation or production of art as part of a bona fide cultural studio program operated by the 501(c)(3) owner under written program standards, with programmatic oversight and services reasonably related to artistic production. The term does not include residential space, commercial gallery or retail space, or space primarily used for unrelated commercial activity.
“(3) OCCUPANCY ARRANGEMENTS AND TRANSITION.—Paragraph (1) shall apply notwithstanding that a participating artist, directly or through an entity owned or controlled by the artist and used for the artist’s practice, occupies the space under a lease, license, membership agreement, or other occupancy agreement. An agreement in effect when the program begins may remain in effect for its then-current term, including any renewal option held on that date, if the artist agrees in writing to qualifying artistic use and program oversight; any new extension or renewal granted thereafter shall be subject to written program terms. Receipt by an artist of income from work created in the space shall not, by itself, constitute private business use.
“(4) REGULATIONS.—The Secretary may prescribe such regulations, including anti-abuse rules, as are necessary to carry out this subsection.”.
(b) EFFECTIVE DATE.—The amendment made by this section shall apply to bonds issued after the date of the enactment of this Act.