Bill Would Revive Tax Credit Program
TRENTON – Legislation sponsored by Senate Majority Leader Loretta Weinberg and Senate Budget and Appropriations Chair Paul Sarlo that would expand and update the tax credit program for the film industry has been approved by the Senate Budget and Appropriations Committee.
Offering incentives to movie makers, TV producers and digital media companies to locate in New Jersey, the “Garden State Film and Digital Media Jobs Act” would revive the tax credit program to provide cumulative total tax credits of $75 million for film productions and $10 million for digital media content. The program will run until 2023 when it will be up for renewal.
“We want movies and TV shows to be filmed and produced in New Jersey. They create jobs and economic activity and become part of the state’s cultural identity,” said Senator Weinberg (D-Bergen). “There is a lot of competition among states to attract filmmakers, and industry executives say that tax incentives are often the deciding factor. Reauthorizing and expanding the state incentive program should be a top priority.”
In 2010, Governor Chris Christie suspended the existing incentive program, which had caps of $10 million for motion pictures and $2 million for digital media. No tax credits have been awarded since, leaving New Jersey at a competitive disadvantage.
The bill, S-122, allows for tax credits equal to 30 percent for film production expenses and 20 percent for digital media content expenses when qualifying conditions are met. These would include production commencement within six months of application, percentage of production budget spent in New Jersey, and promoting the state as the location of the film in end credits reading “Filmed in NJ” or “Produced in NJ”.
“Digital media is a growth industry that offers both immediate and long-term value,” said Senator Sarlo (D-Bergen/Passaic). “There is a natural synergy between digital technology and the film industry. We want to take advantage of that in ways that position New Jersey at the forefront of new developments, new technologies and future opportunities.”
To receive the tax credits, a good part of the production would have to take place in New Jersey. An independent auditor would also be brought in to verify the expenditures. The bill clarifies that the Director of Taxation determines the order in which film and digital media tax credits are applied. Tax credits will also be rewarded to game shows that are filmed and produced at nonprofit arts and cultural centers that do not receive state funding.
Dr. Michael Ehrlich, of the New Jersey Institute of Technology’s School of Management, has said that his research shows that the economic benefits of the dormant program were greater than the tax credits and that the expanded version would be even more beneficial to the economy.
The bill was released from committee yesterday with a vote of 11-1-1, and next heads to the Senate for further consideration.