By Joshua Burd
A new law is set to expand New Jersey’s popular film and digital media tax credit program, further bolstering an industry that has attracted some commercial real estate owners.
Gov. Phil Murphy on Wednesday signed the legislation, S4094, which increases the tax credit that a company can seek for certain expenses related to a digital content production. Specifically, an applicant can now seek a tax credit of 35 percent for qualified purchases related to a project in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem counties and 30 percent everywhere else in the state.
Previously, the program allowed for tax breaks of 25 percent in the eight southern New Jersey counties and 20 percent elsewhere. The new law puts the tax credits for digital productions on par with those available for film projects.
The legislation also expands the pool of tax credits that New Jersey can hand out each year to digital production companies, from $10 million to $30 million. The state will still maintain the overall cap on tax credits established in the Economic Recovery Act of 2020, the bill that overhauled New Jersey’s suite of business and development incentives.
“This legislation will ensure that our state remains a top destination for some of our country’s most significant film and TV productions,” Murphy said. “The New Jersey Film & Digital Media Tax Credit Program has brought numerous productions to our state, creating jobs for New Jerseyans, and bringing in money that is being spent with local businesses. We look forward to attracting even more productions to our state with the expanded tax credits and improvements that this legislation provides.”
Enacted in 2018 and subsequently expanded, the state’s film tax credit program has helped attract high-profile projects to New Jersey including West Side Story, The Equalizer and The Many Saints of Newark. Murphy’s team reportedly has dangled the incentives to try to lure Netflix to the state, in hopes that the streaming giant would build a sprawling studio facility here.
In turn, the growing need for studio space has led some real estate investors to build space that they can lease specifically to film and television productions.
“New Jersey offers significant advantages to productions seeking a vast and diverse on and off camera talent pool and an array of authentic sites for all sorts of productions,” said Tim Sullivan, CEO of the state’s Economic Development Authority. “Governor Murphy and the Legislature clearly recognize the opportunity the growth of the film and digital media sector represents for the state and their action today to expand the Film and Digital Media Tax Credit will help New Jersey continue to compete for high-profile productions and the influx of economic activity they bring.”
In a news release Wednesday, the governor’s office noted that S4094 also changes the treatment of excess credit applications in a fiscal year and allows for reallocation among the categories of potential applicants under the law. Meantime, beginning in Fiscal Year 2025, the bill also allows an additional $100 million in tax credits for so-called New Jersey film-lease partners, or production companies that lease at least 50,000 square feet for five or more years, from tax credits authorized under other incentive programs.
“The latest legislation further enhances a program that has been extremely effective in attracting motion picture and television production and production infrastructure,” said Steven Gorelick, executive director of the New Jersey Motion Picture and TV Commission. “Based on the numerous amount of inquiries we are now receiving, it appears that 2022 will another very successful year for New Jersey’s film and television industry.”
Primary sponsors of the legislation include Sens. Paul Sarlo and Gordon Johnson and Assemblymembers William Spearman, Raj Mukherji, Paul Moriarty. Former Senate Majority Leader Loretta Weinberg was also a primary sponsor of the bill
“Due to ever-evolving technologies, the film and television industry is one of the fastest-changing industries in the world,” Weinberg said. “This expansion of the media content tax credit will allow us to keep up with all these trends, and keep New Jersey competitive with other states involved in sound, editing and production activities. These production companies and other media businesses provide good jobs for skilled labor, a market that has long been a backbone of New Jersey’s economy.”
Johnson, who sponsored the legislation as a member of the Assembly, added: “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. 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.”
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