‘Action!’: Film, TV companies can begin applying for N.J. tax credits, EDA says

The New Jersey Economic Development Authority announced Monday the ability for film and television production companies to apply for credit against the corporation business tax and the gross income tax for expenses incurred for the production of films and digital media content in New Jersey.

As part of the Garden State Film and Digital Media Jobs Act signed by Gov. Phil Murphy in July, the New Jersey Film Tax Credit Program is designed to spur economic growth and industry development by encouraging production to take place in New Jersey.

“From beautiful beaches to bucolic farmland, quaint downtowns and bustling urban centers, plus proximity to talent, New Jersey has much to offer production companies,” Murphy said. “The state has a long history of arts and culture, and this program will help to bring the film and media history back to New Jersey, spurring economic activity that will have a ripple effect throughout local communities.”

Since the creation of the New Jersey Motion Picture and Television Commission in 1977, more than 2,000 feature films and television shows have filmed in New Jersey.

As the industry grew more competitive, New Jersey created a 20 percent statewide tax credit in 2005 to help keep film and television production in the state.

However, in 2010, then-Gov. Chris Christie suspended and discontinued the funding of the incentive.

Despite economic growth and pressure from both sides of the aisle, Christie repeatedly vetoed efforts to reinstate the film tax credit program, Assemblyman John Burzichelli (D-West Deptford) told ROI-NJ earlier this year.

“We very clearly saw a demonstrated loss of business, particularly in the northern part of the state, and were simply not competitive,” Burzichelli said. “His administration just did not see the value, despite the persistent and persuasive evidence that it was to our (economic) benefit.”

Therefore, longtime shows such as “Law & Order: Special Victims Unit” and “America’s Got Talent” left to film in New York City.

“Silver Linings Playbook,” starring Jennifer Lawrence and Bradley Cooper, filmed in Pennsylvania despite being based on a novel written in Collingswood by Matthew Quick.

“Win, Win,” a film starring Paul Giamatti, filmed in New York despite being based on the life of Mike Flaherty, a high school wrestling coach and lawyer in New Providence.

“Rachel Getting Married,” starring Millburn native Anne Hathaway, filmed in Connecticut.

And “Boardwalk Empire,” which repeatedly asked to film in Asbury Park, instead filmed and spent $300 million in Coney Island over three years.

“Imagine if someone went to Asbury Park today and spent $300 million,” Burzichelli said. “All that money would have gone toward the creation of a film studio, the local municipality for police and fire, location fees and rental spaces, construction materials for sets — it would have been astounding.”

Today, more than 14,000 New Jersey residents continue working as producers, directors, writers, actors, editors and more in the industry, according to the New Jersey Department of Labor and Workforce Development, but less than 10 percent make their wages in state.

Tom Bernard, co-founder and co-president of Sony Pictures Classics, a current member of New Jersey’s film commission and a resident of Middletown, told ROI-NJ earlier this year about the ramifications of such a workforce.

“Every day our residents spend working in New York is another day their paychecks pay taxes there,” he said.

Tim Sullivan, CEO of the NJEDA, said he and the new administration are looking forward to changing that with a new dawn of film and television production in the state.

“Film and digital media is one of the growth industries targeted by Gov. Murphy’s plan for a stronger and fairer New Jersey economy, and this program will help pave the way for cutting-edge production companies to choose a New Jersey location,” Sullivan said.

The New Jersey Film Tax Credit Program will provide tax credits equal to 30 percent of qualified film production expenses, or 35 percent of qualified film production expenses incurred for services performed and property purchased through vendors headquartered in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem County, as well as an additional 2 percent “diversity” tax credit for productions hiring no less than 15 percent women and minorities.

To be eligible, film and television productions must:

  • Incur more than 60 percent, or more than $1 million ($2 million for digital media productions), of the film’s total pre-production and production costs via services and goods provided by New Jersey vendors;
  • Work with a New Jersey-based certified public accountant to audit costs;
  • Include in its end credits a “Filmed in New Jersey” statement or logo;
  • Be no shorter than 22 minutes in length; and
  • Be intended for national or international distribution.

News shows, current events programming, weather and market reports, talk shows, sporting events and corporate/sales films do not qualify for tax credits, nor do reality shows, with the exception being if a 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 while making a capital investment of at least $3 million into the facility.

Above the line costs are included in the total budget, but salaries of highly compensated individuals are capped at $500,000 per person.

And, film tax credits will be provided on a first-come, first-serve basis and capped at $75 million per year until 2023.

“We welcome projects of all sizes, which will create jobs and other economic opportunities for the state’s diverse communities and businesses,” Sullivan said.

A complete list of eligibility requirements and an application can be found at www.njeda.com/njfilmtaxcredit.

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