NJ Tax Credit Legislation

On July 3rd, 2018, Governor Phil Murphy signed Senate Bill 122, which creates a transferable tax credit program for qualified expenses incurred in the production of certain film and digital media content beginning on or after July 1, 2018.

The details of the program are as follows:

Creates a transferable tax credit equal to 30% (35% in the following municipalities: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem County) of qualified production expenses provided the production company meets the following requirements:

Incurs at least 60% of total film production expenses in-state (exclusive of post production costs) or incurs more than $1 million in qualified production expenses; Commences principal photography within 180 days from the original application date or 150 days from the date of approval of the application; and,

Withholds 6.37% from each payment to a loan out company or independent contractor;

Excludes payments in excess of $500,000 made to a highly compensated individual for:

Costs for a story, script, or scenario used in the production of a film; and,

Wages or salaries or other compensation for writers, directors, including music directors, producers, and performers; and,

Allows a reality television show to be eligible for the tax credit if the production company commits to the following:

Own, lease, or occupy a production facility of no less than 20,000 square feet for a minimum term of 24 months and invest no less than $3 million in such facility which must be located in an Urban Enterprise Zone; and,

Allows the production entity an additional credit equal to 2 percent of the qualified film or digital media production expenses provided that:

The application is accompanied by a diversity plan;

The plan is approved; and,

The authority has verified that the applicant has met or made good faith efforts in achieving the goals stated within the diversity plan.

Establishes an annual funding cap of $75 million per fiscal year (July 1 - June 30) thru June 30, 2023.

Digital media projects earn 20% - 25% and have different requirements.