Changes will expand tax credit program to more productions and create jobs through development of studios
TRENTON, N.J. (June 8, 2022) – The New Jersey Economic Development Authority (NJEDA) Board approved at its June Board meeting proposed amendments to the New Jersey Film & Digital Media Tax Credit Program rules, with a goal of attracting more production companies to film and create digital media content in New Jersey and to encourage the development of large-scale studios in the state.
The New Jersey Film and Digital Media Tax Credit was established by Governor Phil Murphy in 2018 and later expanded through a series of legislative changes, most notably in 2021 as part of the New Jersey Economic Recovery Act of 2020 (ERA). The program helps to strengthen the State’s economy by attracting film, television, and digital media production, as well as the associated economic benefit that is generated through these productions, such as permanent job creation, decent living wages, increased tourism activity and spending, infrastructure and community investment in production facilities, support for local small businesses and vendors, and the expected surge in value from media exposure.
Since its creation, over 68 productions have been approved for tax credits based on expenditures of $766 million into the state’s economy. These tax incentives have helped to attract major film and television productions to New Jersey, such as “Joker,” “West Side Story,” “The Many Saints of Newark” and CBS’ “The Equalizer.”
“New Jersey has positioned itself as a compelling destination for the film and digital media industry under Governor Murphy’s leadership as we continue to attract big-studio productions to our state,” said NJEDA CEO Tim Sullivan. “Our diversity of locations means you can film mountains, cities, beaches and farms all in the same day, while our best-in-class tax incentive program and unmatched talent pool make New Jersey among the most cost-effective places in the nation to shoot a film. That’s a powerful combination and the film industry has begun to take notice.”
The proposed new rules approved by the NJEDA Board address changes to the legislation, including an increase in the amount of tax credits available annually, specific allocations of tax credits for long term commitments from larger studio development projects, an expansion of the program’s diversity bonus, and an extension of the timeline of the program to 2034.
Sullivan noted that, to date, more than half of productions supported by the program were approved for bonuses based on the inclusion of diversity plans for the recruitment and hiring of minorities and women.
“The New Jersey Film and Digital Media Tax Credit program is paving the way for our state to reinforce its legacy as premier destination for leading film and television productions,” said New Jersey Secretary of State Tahesha Way. “Under Governor Murphy’s leadership, this program has brought many productions to our state, creating job opportunities for people from diverse backgrounds, and injecting millions of dollars into local businesses. This translates into long-term economic benefits and improved quality-of-life for these communities and their residents.”
The amendments approved by the Board address other statutory changes such as increases to the amount of tax credits available annually under the program to $100 million per state fiscal year for applicants not considered film-lease partners or studio partners, $100 million per state fiscal year for studio partners, $100 million per state fiscal year for film-lease partners, and $30 million per fiscal year for digital media projects. Additionally, the proposed new rules include other statutory additions as an increase in the diversity bonus from two percent to four percent to encourage the hiring minority, local, on-screen talent, which will help ensure opportunities are accessible to qualified New Jersey residents from all backgrounds.
Statutory changes now allow the program to run through 2034 and increased the credit allowed for film projects from 30 percent to 35 percent of certain qualified film production expenses. The digital media tax credit was also increased from 20 percent to 30 percent. The rules establish annual reporting requirements for certain projects and allow for the Authority to recapture or reduce the tax credit amounts for certain projects.
The Board-approved proposed rules will be published for public comment after which the Board will consider final adoption of the rules.
In addition to the Film and Digital Media Tax Credit program, the ERA creates a suite of programs that includes tax credits to incentivize job creation, new construction, and revitalization of brownfields; financial resources for small businesses; support for new supermarkets and healthy food retailers in food desert communities; and new funding opportunities for early-stage companies in New Jersey. More information about these programs is available at https://njeda.com/economicrecoveryact.
Article Courtesy of the NJEDA