In an effort to further incentivize movie, television and other digital media projects to come to New Jersey, a bill sponsored by Assembly Democrats Gordon Johnson, William Spearman, Raj Mukherji and Paul Moriarty to expand the state’s film and digital media content production tax credit program was signed into law Wednesday.
Digital media projects often deal with post-production activities, such as editing and sound synchronization. Under the initial tax credit program, digital media productions were eligible for tax credits equal to 20 percent of their qualified expenses within the state or up to 25 percent of qualified expenses in South Jersey. Expenses could include the cost of computer hardware/software, visualization technology, and facility or equipment rentals – among others.
This law (formerly bill A-6070/S-4094) increases the maximum tax credit amount for digital media productions to 30 percent of qualified expenses or 35 percent in South Jersey– similar to the amount for which film productions are currently eligible. It also increases the total amount of tax credits these projects could receive from $10 million to $30 million.
“Digital media projects are just as important to the entertainment industry and economy as film projects, and deserve the same opportunities to grow and thrive in our state,” said Assemblyman Johnson (D-Bergen). “This law will give New Jersey an even more competitive edge by further establishing our state as an appealing destination for creative projects of all kinds.”
Film-lease partners, who lease or acquire a large New Jersey production facility for five or more years and commit to spending an average of $50 million on qualified expenses each year, are eligible for tax credits under the film and digital media content production tax credit program. This law revises the program to allow partners who lease a portion of a film production facility – rather than an entire facility – to qualify for tax credits, as long as they meet other criteria set forth in the program.
“As our state continues to recover from the challenges of the COVID-19 pandemic, we must make it a priority to attract more businesses to New Jersey on behalf of our residents,” said Assemblyman Spearman (D-Camden, Gloucester). “Expanding this critical program to bring in additional film and digital media projects will create new jobs, yield more revenue for local businesses, and ultimately invigorate our economy.”
The law further incentivizes film-lease partners to acquire production facilities in the state by permitting an additional $100 million to be made available annually at the discretion of the New Jersey Economic Development Authority (NJ EDA). Beginning in Fiscal Year 2025, these additional tax credits could be made available using leftover funds from amounts previously allocated to certain programs under the Economic Recovery Act of 2020.
“Film and digital media productions are going to serve as an important component of our state’s economy in the coming years, as our tax credit program incentivizes the industry’s growth in New Jersey,” said Assemblyman Mukherji (D-Hudson). “Countless residents with the talent and skill to work on these creative productions will now have more opportunities to do so.”
“This law builds on a valuable program that helps generate jobs and promote business throughout our state,” said Assemblyman Moriarty (D-Camden, Gloucester). “I look forward to the further expansion of this industry in New Jersey and the benefits our residents will see as a result of these changes.”
The act takes effect immediately.