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FILM AND DIGITAL MEDIA TAX CREDIT PROGRAM


For the full New Jersey Motion Picture and Film Commission website, please visit
NJ DOS – NJ Motion Picture & Television Commission.

Provides a transferable credit against the corporation business tax and the gross income tax for qualified expenses incurred for the production of certain film and digital media content in New Jersey. 

The goal of the program is to incentivize production companies to film and create digital media content in New Jersey.“For the full New Jersey Motion Picture and Film Commission website, please visit NJ DOS – NJ Motion Picture & Television Commission.


Available tax credits up to 35 % for film
and digital media productions.


Tax credit up to 35 percent of qualified film production expenses

NOTE:
Qualified film production expenses incurred for services performed and tangible personal property purchased for use at a sound stage or other location that is located in the State within a 30-mile radius of the intersection of Eighth Avenue/Central Park West, Broadway, and West 59th Street/Central Park South, New York, New York are eligible for 30 percent.

APPLICATION

NOTE: Tax credits are available on a first-come, first-served basis, based on the date/time a fully completed application is received by the NJEDA. If an incomplete application is received, the NJEDA will notify the applicant, who will be required to provide the additional information and re-submit the application.  In this scenario, the date/time of record will be based upon when the complete application is resubmitted, not the initial submittal of the incomplete application.

ELIGIBILTY

In order for a film project to be eligible for tax credits under the NJ Film Tax Credit Program, the film project must:

  • Be a feature film, a television series, or a television show of 22 minutes or more in length, intended for a national audience, or a television series or a television show of 22 minutes or more in length intended for a national or regional audience, including, but not limited to, a game show, award show, or other gala event filmed and produced at a nonprofit arts and cultural venue receiving State funding.  Productions featuring news, current events, weather, and market reports or public programming, talk show, sports event, or reality show, a production that solicits funds, a production containing obscene material as defined under N.J.S.2C:34-2 and N.J.S.2C:34-3, or a production primarily for private, industrial, corporate, or institutional purposes are not eligible for film tax credits.
  • Meet one of the following expense eligibility thresholds:

60 percent of the total film production expenses (exclusive of post -production costs) must be incurred for services and goods purchased through vendors authorized to do business in New Jersey

Qualified film production expenses (expenses incurred in New Jersey for the production of a film) must exceed $1 million per production.

  • End credits must include “Filmed in New Jersey” statement or logo.
  • Principal photography of the project must commence within 180 days of application.
  • “Reality shows”, which are otherwise ineligible, may be eligible for the Film Tax Credit Program if the production company of the reality show owns, leases, or otherwise occupies a production facility of at least 20,000 square feet in an Urban Enterprise Zone for at least two years, and, after July 1, 2018, makes a capital investment of at least $3 million in that facility.

FEES

Application Fee:

All fee tiers are based on each application’s qualified film production expenses. The fee tier then sets each fee amount.

Application Fees are non-refundable and due at application submission.

Approval Fees are non-refundable (unless the project is declined) and due prior to project approval

Issuance Fees are non-refundable and due prior to tax credit issuance.

Credit Transfer Fees are non-refundable and due at tax credit transfer application submission and are per transfer.

*Each project is also subject to a non-refundable 3rd party budget review fee due prior to project approval.

*Application fees are subject to change if submitted budget amounts change prior to approval.

The primary objective of the 2% Diversity Tax Credit is to stimulate job growth by encouraging film productions to employ the services of women and minority persons. The structure of this program seeks to further ensure that equal employment opportunities are offered to “above-the-line” positions (generally, key creative positions) as well as “below-the-line” positions (all other production crew). 

Requirements:

(a) An applicant  that seeks to increase its award through the use of a diversity plan shall submit a completed plan (see Form A – Diversity Plan) to NJEDA before the NJEDA may approve an application pursuant to the applicable program rules. An applicant may consult with the NJEDA regarding the requirements of the diversity plan in advance of submitting the plan.

(b) The diversity plan shall identify that the applicant intends to prioritize actively recruiting and hiring African Americans, Hispanic, Asian Americans, Native Americans, and women in all areas of production of the film, specifically production crew and staff, entry level positions, management positions and talent related positions.

(c) An overall goal of not less than 15 percent shall be utilized in the hiring of minority persons and women. All diversity plans must identify goals for hiring both minority persons and women.

(d) The diversity plan will indicate whether and, if so, how the applicant intends to participate in training, education and recruitment programs that are organized in cooperation with New Jersey state colleges and universities, labor organizations, and the motion picture industry and are designed to promote and encourage the training and hiring of New Jersey residents who represent the diversity of the state’s population. Such cooperation is encouraged but not required.

(e) The diversity plan shall indicate which efforts the applicant will make to ensure equal employment opportunities for minority persons and women in the recruitment, selection, appointment, promotion, training, and related employment areas. These actions may include advertising,  recruitment, and internship opportunities

Program Reporting:

If as part of the final documentation required for final approval of the tax credit,  the applicant submits evidence satisfactory to the NJEDA and the Director of the Division of Taxation of good faith-efforts to accomplish all the actions described in the diversity plan, the final tax credit amount will include the bonus. If the final approval of the applicant’s tax credit application does not include the bonus, the applicant may appeal the final approval as described in the program rules at N.J.A.C. 19:31-21.7(f).

Certification:

In order to support the fact that an individual who worked on the production is a woman or minority person, consistent with the applicable rules, the applicant must provide payroll information detailing which individuals working on the production self-identified as either minority and/or woman, or provide the Authority with a copy of the Diversity Tracking Sheet, (see Form B – Diversity Tracking Sheet) from the individual, if the information is not available from the payroll company.

Good Faith:

The applicant shall undertake appropriate outreach and talent acquisition activities that are reasonably designed to effectively identify, recruit and incorporate women and minority persons into the applicable film production.  Good faith efforts are assessed using various factors, including, but not limited to the following, which shall be provided by the applicant:

  • A report prepared by the payroll company or the diversity employment tracker (if payroll information is not available) listing the applicant’s overall number of production workers, by category, upon completion of filming.
  • The names, addresses, and other information provided on the payroll information or on the Diversity Tracking Sheets of minority and women production workers, by category, upon completion of filming.
  • The final diversity numbers of the production.
  • Documentation of efforts made to recruit and hire women and minority persons to meet the goals of the diversity plan. This can include, casting solicitations, e-mail confirmation or other correspondence to those people contacted but not hired. A list of names, dates and times of people and/or businesses that were contacted may be considered as well.
  • The NJEDA may contact the individuals and businesses listed by the applicant to verify the good faith efforts.

Audit Process:

NJEDA or the Division of Taxation may audit the applicant’s submissions, in which case the NJEDA or the Division of Taxation may ask for documents supporting the application and submitted documentation regarding the diversity plan, including, but not limited to, any of the following documents:

  • the books, records and supporting documents of the eligible production corporation
  • agreements and contracts between actors, producers, directors, and other persons and the eligible production corporation
  • any other documents that may be needed to support your claim

NOTE: Tax credits are available on a first-come, first-served basis, based on the date/time a fully completed application is received by the NJEDA. If an incomplete application is received, the NJEDA will notify the applicant, who will be required to provide the additional information and re-submit the application.  In this scenario, the date/time of record will be based upon when the complete application is resubmitted, not the initial submittal of the incomplete application.

Pursuant to PL 2018 c.56, principal photography must begin within 180 days of a complete application.

Projects utilizing NJEDA financial assistance for construction related costs are subject to state prevailing wage requirements.
 
Effective April 1, 2020 all construction contracts in which prevailing wage applies must provide proof of valid NJ Department of Labor Construction Registration Certification. Please email PWCR@dol.nj.gov if you have any questions about this requirement. Please be advised that a valid Contractor Registration Certificate is required to perform construction on this NJEDA financially assisted project.

STUDIO AND FILM-LEASE PARTNER

To encourage the development of large, long term studio facilities, two additional and separate allocation designations were created by the Economic Recovery Act of 2020, one for Studio Partners and one for Film-lease Partners.

Studio Partners would first apply to the Authority for the designation and then submit subsequent applications for each film project produced in New Jersey thereafter.

Projects submitted by a studio partner or film-lease production company will be calculated at 35-40% based on certain qualified production expenses. The studio partner and film-lease production company projects have their own approval queue and annual allocation of $150MM per fiscal year.

Studio Partner

To be eligible to apply for the Studio Partner designation, the applicant must be a production company that has site control of a production facility that is at least 250,000 sqft for at least 10 years. 

Prior to approval, the production facility site would need to have at least preliminary site plan approval, an executed redevelopment agreement, or an adopted redevelopment plan that contemplates the construction of the production facility and following designation approval, be able to provide temporary or permeant certificate of occupancy for the facility within 36 month.

Depending on the amount of qualified film production expenses involved in each submitted project, a Studio Partner is able to capture additional Above-the-line(ATL) wage and salary expenses in its award calculation as follows:

  • For a studio partner that incurs $15 million but less than $50 million in qualified film production expenses, they can include up to $18 million in ATL wage and salary expenses as qualified per project;
  • For a studio partner that incurs $50 million or more in qualified film production expenses, they can include up to $72 million in ATL wage and salary expenses as qualified per project;

No more than 3 designations can be made for studio partners

Film-Lease Partner Facility Designation

To be eligible for the Film-Lease Production Facility designation, the applicant must be an owner or developer who commits or own, lease, or operate a production facility of at least 250,000 sqft for a period of 5 or more successive years.

The owner or developer of the facility will partner with the EDA and shall accept an equity investment in the project from the EDA, at the EDA’s discretion, as a condition of approval for the Film-lease Partner Facility designation.

There are no direct film tax credits available with a film-lease partner facility designation. However, the designation would allow certain production companies who use the facility to received higher award amounts under the program. No more than 3 designations can be made for film-lease partner facilities.

Film-Lease Production Company

To be eligible for the Film-Lease Production company designation, the applicant must be a production company who commits to lease or otherwise occupy production space within a Film-lease Production Facility.

Film-lease production companies must film at least 50% of the total principal photography days of the project within New Jersey and film at least 50% of the NJ principal photography days within the designated Film-lease Production Facility.

Depending on the amount of qualified film production expenses involved in each submitted project, a film-lease production company is able to capture additional Above-the-line(ATL) wage and salary expenses in its award calculation as follows:

  • For a film-lease production company that incurs less than $50 million in qualified film production expenses, they can include up to $15 million in ATL wage and salary expenses as qualified per project;
  • For a film-lease production company that incurs $50 million or more in qualified film production expenses, can include up to $60million in ATL wage and salary expenses as qualified per project;

Apply Here for Studio Partner or Film-Lease Partner Facility Designation

Tax credit equal to 30 percent of qualified digital media production expenses, or 35 percent of qualified digital media production expenses incurred for services performed and tangible personal property purchased through vendors whose primary place of business is located in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem County

APPLICATION

NOTE: Tax credits are available on a first-come, first-served basis, based on the date/time a fully completed application is received by the NJEDA. If an incomplete application is received, the NJEDA will notify the applicant, who will be required to provide the additional information and re-submit the application.  In this scenario, the date/time of record will be based upon when the complete application is resubmitted, not the initial submittal of the incomplete application

ELIGIBILITY

In order for a film project to be eligible for tax credits under the NJ Digital Media Tax Credit Program, at least $2 million of the total digital media production expenses must be incurred for services performed and goods purchased through vendors authorized to do business in New Jersey and at least 50 percent of the qualified digital media content production expenses must be for wages and salaries paid to full-time employees in New Jersey.

FEES

Application Fee:

All fee tiers are based on each application’s qualified film production expenses. The fee tier then sets each fee amount.

Application Fees are non-refundable and due at application submission.

Approval Fees are non-refundable (unless the project is declined) and due prior to project approval

Issuance Fees are non-refundable and due prior to tax credit issuance.

Credit Transfer Fees are non-refundable and due at tax credit transfer application submission and are per transfer.

*Each project is also subject to a non-refundable 3rd party budget review fee due prior to project approval.

*Application fees are subject to change if submitted budget amounts change prior to approval.

The primary objective of the 2% Diversity Tax Credit is to stimulate job growth by encouraging film productions to employ the services of women and minority persons. The structure of this program seeks to further ensure that equal employment opportunities are offered to “above-the-line” positions (generally, key creative positions) as well as “below-the-line” positions (all other production crew). 

Requirements:

(a) An applicant  that seeks to increase its award through the use of a diversity plan shall submit a completed plan (see Form A – Diversity Plan) to NJEDA before the NJEDA may approve an application pursuant to the applicable program rules. An applicant may consult with the NJEDA regarding the requirements of the diversity plan in advance of submitting the plan.

(b) The diversity plan shall identify that the applicant intends to prioritize actively recruiting and hiring African Americans, Hispanic, Asian Americans, Native Americans, and women in all areas of production of the film, specifically production crew and staff, entry level positions, management positions and talent related positions.

(c) An overall goal of not less than 15 percent shall be utilized in the hiring of minority persons and women. All diversity plans must identify goals for hiring both minority persons and women.

(d) The diversity plan will indicate whether and, if so, how the applicant intends to participate in training, education and recruitment programs that are organized in cooperation with New Jersey state colleges and universities, labor organizations, and the motion picture industry and are designed to promote and encourage the training and hiring of New Jersey residents who represent the diversity of the state’s population. Such cooperation is encouraged but not required.

(e) The diversity plan shall indicate which efforts the applicant will make to ensure equal employment opportunities for minority persons and women in the recruitment, selection, appointment, promotion, training, and related employment areas. These actions may include advertising,  recruitment, and internship opportunities

Program Reporting:

If as part of the final documentation required for final approval of the tax credit,  the applicant submits evidence satisfactory to the NJEDA and the Director of the Division of Taxation of good faith-efforts to accomplish all the actions described in the diversity plan, the final tax credit amount will include the bonus. If the final approval of the applicant’s tax credit application does not include the bonus, the applicant may appeal the final approval as described in the program rules at N.J.A.C. 19:31-21.7(f).

Certification:

In order to support the fact that an individual who worked on the production is a woman or minority person, consistent with the applicable rules, the applicant must provide payroll information detailing which individuals working on the production self-identified as either minority and/or woman, or provide the Authority with a copy of the Diversity Tracking Sheet, (see Form B – Diversity Tracking Sheet) from the individual, if the information is not available from the payroll company.

Good Faith:

The applicant shall undertake appropriate outreach and talent acquisition activities that are reasonably designed to effectively identify, recruit and incorporate women and minority persons into the applicable film production.  Good faith efforts are assessed using various factors, including, but not limited to the following, which shall be provided by the applicant:

  • A report prepared by the payroll company or the diversity employment tracker (if payroll information is not available) listing the applicant’s overall number of production workers, by category, upon completion of filming.
  • The names, addresses, and other information provided on the payroll information or on the Diversity Tracking Sheets of minority and women production workers, by category, upon completion of filming.
  • The final diversity numbers of the production.
  • Documentation of efforts made to recruit and hire women and minority persons to meet the goals of the diversity plan. This can include, casting solicitations, e-mail confirmation or other correspondence to those people contacted but not hired. A list of names, dates and times of people and/or businesses that were contacted may be considered as well.
  • The NJEDA may contact the individuals and businesses listed by the applicant to verify the good faith efforts.

Audit Process:

NJEDA or the Division of Taxation may audit the applicant’s submissions, in which case the NJEDA or the Division of Taxation may ask for documents supporting the application and submitted documentation regarding the diversity plan, including, but not limited to, any of the following documents:

  • the books, records and supporting documents of the eligible production corporation
  • agreements and contracts between actors, producers, directors, and other persons and the eligible production corporation
  • any other documents that may be needed to support your claim

NOTE: Tax credits are available on a first-come, first-served basis, based on the date/time a fully completed application is received by the NJEDA. If an incomplete application is received, the NJEDA will notify the applicant, who will be required to provide the additional information and re-submit the application.  In this scenario, the date/time of record will be based upon when the complete application is resubmitted, not the initial submittal of the incomplete application.

Projects utilizing NJEDA financial assistance for construction related costs are subject to state prevailing wage requirements.
 
Effective April 1, 2020 all construction contracts in which prevailing wage applies must provide proof of valid NJ Department of Labor Construction Registration Certification. Please email PWCR@dol.nj.gov if you have any questions about this requirement. Please be advised that a valid Contractor Registration Certificate is required to perform construction on this NJEDA financially assisted project.

PROGRAM GUIDE

QUESTIONS

For questions regarding the New Jersey Film & Digital Media Tax Credit Program contact

Matthew Sestrich
Manager – Film & Digital Media Financing & Incentives
Sector Financing & Incentives
CHris Del Vecchio
AnalystSector Financing/Incentives
Sector Financing & Incentives

or the New Jersey Motion Picture and Television Commission at (973) 648-6279