Assemblyman Moriarty Bill Aimed at Incentivizing Media Production in New Jersey Now Law
Legislation sponsored by Assemblyman Paul Moriarty entitled the ‘Garden State Film and Digital Media Jobs Act’ was signed into law Tuesday.
The new law (A-1038) provides a credit against the corporation business tax and gross income tax for certain expenses incurred for the production of certain films and digital media content in New Jersey commencing on or after July 1, 2018 but before July 1, 2023.
A two percent tax credit also will be offered for qualified film production expenses and digital media content production expenses to productions that make significant efforts to increase diversity in hiring.
After the approval of an application sent to the New Jersey Economic Development Authority and the Director of the Division of Taxation in the Department of the Treasury, taxpayers would be allowed a credit amount equal to 30 percent of the qualified film production expenses and 20 percent of the qualified digital media content production expenses.
“There are so many parts of our beautiful state which could be utilized for film, and so many of our residents who could contribute to these films,” said Moriarty. “This new law will put the infrastructure in place to realize these possibilities.”
If the expenses are incurred for services performed and/or personal property used or consumed in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem County, the allowable credit would increase to 35 percent and 25 percent respectively.
In order to claim the tax credit for qualified film production expenses, the following conditions must be met:
· at least 60 percent of the total film production expenses, exclusive of post-production costs are incurred in New Jersey, or the qualified production expenses exceed $1,000,000
· the film includes marketing materials promoting the state of New Jersey in the film and include an appropriate logo at the end of the credits denoting that the piece was filmed in New Jersey
· principal photography of the film commences within 180 days from the date of the application for the tax credit, or 150 days from the approval of the application
In order to claim the tax credit for qualified digital media content production expenses, the following conditions must be met:
· at least $2,000,000 of the total digital media content production expenses are incurred in New Jersey
· at least 50 percent of the qualified digital media content production expenses are for wages and salaries paid to full-time or full-time equivalent employees in New Jersey
Both applicants for the film production and digital media content tax credits must submit a tax credit verification report prepared by an independent certified public accountant licensed in New Jersey and comply with the withholding requirements provided for payments to loan out companies and independent contractors.
There is a limit of $75 million in tax credits that may be accumulated during each year of the five-year duration for film production expenses and $10 million for qualified digital media content.
The bill received final legislative approval by the full Assembly, 59-18, June 25.