NJ Governor Phil Murphy has signed legislation to expand tax credits for digital media production as part of a campaign to attract new businesses to the state following his incentives to cinema and television.
Murphy launched a film and television tax credit scheme in 2018 and expanded it in 2020. It has boosted production, attracting projects like West Side Story, the equalizer and The Many Saints of Newark. The latter law grants the same treatment to digital media, which it did not define but which can include a range of content from entertainment websites and digital publishing to video games. Major digital businesses in the state include the NBC Universal Digital Media Campus in Englewood Cliffs (where CNBC is headquartered) and Amazon-owned Audible, based in Newark.
The new legislation increases the portion of the tax credit program allocated to digital media content to 30% of eligible expenses in the state and 35% in specific counties (Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester , Mercer or Salem). It also increases the cumulative annual limit for tax credits for the production of digital media content from $10 million to $30 million.
“Digital media projects are just as important to the entertainment industry and the economy as film projects, and deserve the same opportunities for growth and prosperity in our state,” said State Senator Gordon Johnson, one of the sponsors of the legislation.. “This law will give New Jersey an even greater competitive advantage by further establishing our state as an attractive destination for creative endeavors of all kinds.”
The new legislation didn’t really change film and TV credits, which are still set at 30% or 35% depending on location, plus a scalable ‘diversity bonus’ of 2% to 4%. The only new thing in film/television is that starting in fiscal year 2025, the state will allocate an additional $100 million in tax credits to New Jersey’s movie rental partners (companies that rent 50,000 square feet of space).
NJ currently has $100 million each for three producer designations — movie rental partners, studio partners (companies that rent 50,000 square feet of space) and one-time productions. The first two were developed last January to stimulate the development of the studio. The new law facilitates the transfer of funds from movie rental partners to the other two categories.
Details will be released in March.
Overall, New Jersey’s Film and Digital Media Tax Credit program “will ensure that our state remains a premier destination for some of our nation’s most important film and television productions,” Murphy said. .
New Jersey is strategically located between New York and Philadelphia. Being in the backyard of New York, it has its fair share of skilled labor in the industry. “But convenience is nothing if it doesn’t also make financial sense to attract business activity,” said State Sen. Paul Sarlo, another backer. “By increasing appropriations for these programs and improving the financial incentive to support the film industry and digital media in our state, we can solidify New Jersey as a destination of choice for these projects.”
Attracting new business is especially critical as the state continues to recover from the challenges of the Covid-19 pandemic, lawmakers noted.
The MPA also weighed in: “Governor Murphy paved the way for the enactment of a strong production incentive program in 2018 and New Jersey has already benefited from the film, television and streaming industry. directly supporting more than 20,000 jobs and more than $2 billion in wages.” Chairman and CEO Charles Rivkin said in a statement. “This program is getting stronger with new enhancements enacted last night that will create more jobs in the state and investments in the New Jersey economy. I commend Governor Murphy for his continued leadership and all creative economy champions in the Legislature for expanding New Jersey’s Production Incentive Program.