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  • NJ A2562
  • "Garden State Film and Digital Media Jobs Act"; enhances film and digital media tax credits, revises and expands tax credit eligibility requirements, and requires EDA to study development of film studio at North Jersey location.
Introduced
(2/4/2016)
In Committee
(2/4/2016)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill, designated as the "Garden State Film and Digital Media Jobs Act," enhances the corporation business tax and gross income tax credits for qualified film and digital media content production expenses, revises and expands film and digital media tax credit eligibility requirements, and requires the New Jersey Economic Development Authority to study the prospect of developing a film production studio at a North Jersey location. Film and Digital Media Tax Credit Enhancements. The bill enhances the film and digital media tax credits by increasing the incentive value of tax credits that may be claimed for certain qualified expenses. The bill provides that the increased incentive values are permitted to be claimed for qualified film and qualified digital media content production expenses that represent: -- purchases of goods through a qualified business in a urban enterprise zone or purchases of services performed by a resident of an urban enterprise zone (22% instead of the current 20%), -- wages and salaries of eligible film and digital media student hires employed in the production of a film or digital media content (22% instead of the current 20%), and -- expenses incurred in an eligible municipality for the production of a film or digital media content (40% instead of the current 20%). The bill enhances the credits by increasing the annual caps that limit the total amount of film and digital media tax credits awarded each fiscal year. The bill provides that in 2016, and in each fiscal year prior to 2023, $50 million in credits may be awarded to eligible taxpayers for qualified film production expenses (currently capped at $10 million per year), and $10 million may be awarded to eligible taxpayers for qualified digital media content production expenses (currently capped at $5 million per year). The bill enhances the credits by extending the expiration date of the law authorizing the tax credits. Under the bill, the provisions of P.L.2005, c.345 are extended from corporation business tax and gross income tax years beginning before July 1, 2015 to tax years beginning before July 1, 2022. In addition, the bill enhances the credits by making digital media tax credits available to gross income taxpayers, defining as gross income taxpayers certain partnerships, S corporations, limited liability companies, cooperatives, and non-profit corporations so as to permit them to claim film and digital media tax credits, extending digital media tax credits to salaries and wages paid to full-time employees who are not new employees, and both narrowing the definition of film or television show, from a show at least 15 minutes in length to one at least 22 minutes in length, and broadening the definition of a film to include certain television series and shows not currently included as eligible productions. Revises and Expands Tax Credit Eligibility Requirements. The bill revises the existing eligibility requirements for taxpayers seeking to claim film and digital media tax credits. The bill clarifies current criteria by specifying that an applicable portion of film or digital media production expenses incurred by taxpayers must be incurred for services performed and goods purchased through vendors authorized to do business in New Jersey, and by stipulating, for purposes of the film credit, that principal photography of the film must commence the earlier of 180 days from the date of the original application for the credit or 150 days from the date application is approved. The bill expands existing eligibility requirements by establishing new conditions for taxpayers seeking to claim film and digital media tax credits. Under the bill, these new conditions require taxpayers to: -- enter into a public-private partnership with a four-year public institution of higher education in this State, -- demonstrate that approval of the application for the credit will result in a net positive benefit to the State, -- submit an agreed-upon procedures report to verify the tax credit claim, -- comply with withholding requirements provided for payments to loan out companies and independent contractors, and -- include in the end credits marketing materials promoting this State as a film and entertainment production destination. The bill replaces existing refund provisions under the gross income tax credit for qualified film and digital media content production expenses with provisions that allow taxpayers to carry forward the amount of any excess credit for up to seven years following the taxable year for which the credit was allowed. Film Production Studio Study. The bill requires the authority, in consultation with the Motion Picture and Film Development Commission, to study the prospect of developing a film production studio at a North Jersey location (Bergen, Essex, Hudson, Morris, Passaic, or Union County). The bill requires the study to determine which, if any, tax credit incentives are needed to locate and operate the studio at a location in North Jersey, whether having a studio at a North Jersey location will attract film production to the State, the production companies that may be interested in building a studio at a location in North Jersey, the potential locations of a studio in North Jersey, and the potential economic benefits of having a studio in North Jersey. The bill requires the authority to complete and submit a copy of the study to the Governor and the Legislature on or before the 360th day following the effective date of the bill. Effective Dates. Granting of credits is extended from corporation business tax and gross income tax years beginning before July 1, 2015 to tax years beginning before July 1, 2022. The effective date clause of P.L.2005, c.345 is modified by the bill to clarify that the corporation business tax and gross income tax credits, which may be carried forward if necessary for up to seven years, remain in effect on and after July 1, 2022 when the credits may no longer be granted. The revisions and expansions of the tax credit eligibility requirements apply to the corporation business tax and gross income tax years beginning on and after July 1, 2015 but before July 1, 2022.
Not specified
Reported and Referred to Assembly Appropriations Committee  (on 2/4/2016)
 
 

Date Chamber Action Description
2/4/2016 A Reported and Referred to Assembly Appropriations Committee
2/4/2016 A Introduced, Referred to Assembly Commerce and Economic Development Committee
Date Motion Yea Nay Other
Detail 2/4/2016 Assembly Commerce and Economic Development Committee: Reported Favorably 8 4 0