TRENTON – Today, Senator Paul A. Sarlo said a new report by an international accounting firm cites benefits, including millions in State revenue and thousands of high-paying jobs for New Jersey residents, which “more than justify” enacting his legislation to create a digital media tax credit that will draw in new high-tech, high-growth firms to the State.
“New Jersey has been on the cutting edge of latest technology trends in the economy, but we need to be aggressive if we’re going to maintain our prominent place in the nation,” said Senator Sarlo, D-Bergen, Essex and Passaic. “The latest report on the benefits of a digital media tax credit further demonstrate just what’s at stake – thousands of high-paying jobs and hundreds of millions of dollars in economic activity for New Jersey. Now more than ever, we need to provide incentives for digital media companies to locate to the Garden State.”
Senator Sarlo’s bill, S-2526, which was approved by the Legislature in June and is awaiting enactment by Governor Corzine, would provide tax credits to digital media production companies located in the State. The bill would expand New Jersey’s film production expenses credit program to provide a credit for digital media companies as well, and would raise the annual cap on total tax credits from $10 million to $30 million. The measure is patterned after the State’s successful film production credit program, which has served as a valuable incentive for film producers to shoot in the Garden State, and is designed to draw in high-tech, high-growth digital media business to New Jersey, Senator Sarlo said.
Since the bill was first introduced in April, new research has shown the growth potential for digital media is even greater than initially reported. The new data has been analyzed by economists at the international firm, Ernst & Young, who have determined that S-2526 will generate the following benefits to the New Jersey economy in just its first five years after becoming law:
- The proposal is projected to create 6,850 new jobs, up from the 4,300 initially projected.
- It will generate over $1.5 billion in new economic activity by New Jersey businesses, up from $985 million estimated previously.
- By 2012 the digital media credit is projected to generate more than $36 million in new state and local tax revenues (up from the $15.8 million initially projected).
- Finally, as the industry continues to thrive in New Jersey as a result of the credit, by 2015 new State revenues alone will be $90 million which is $50 million higher than initially projected.
“New Jersey is just as committed today to taking a leadership role in the New Economy as we were when the bill was announced in April, and we are serious about supporting the growth of digital media in our State,” said Senator Sarlo. “This new research on the potential of S-2526 to create jobs for New Jersey residents and grow our economy further validates the need for digital media incentives. With this latest data in hand, we need to push harder than ever before to make the digital media tax incentive a reality.”
“Senator Sarlo’s efforts present the best opportunity to build our economy by attracting high growth businesses that will help anchor our economy through the current period of transition and serve as a platform for economic expansion in the future,” said Senator Joseph M. Kyrillos, R-Monmouth and Middlesex, a co-prime sponsor of the legislation.
Throughout the legislative process, representatives from several major companies and advocacy groups – including the New Jersey Business and Industry Association (NJBIA), Cisco Systems, the Walt Disney Company, the New Jersey Institute of Technology (NJIT), the Entertainment Software Association, the Motion Picture Association of America, NBC Universal and the New Jersey Chamber of Commerce – have come out to support Senator Sarlo’s measure.