Bill > S3275

Introduced Session

This bill revises certain provisions of the film and digital media content production tax credit program to include eligibility for wages and salaries paid to persons who are not subject to tax under the "New Jersey Gross Income Tax Act" due to a tax reciprocity agreement with another state. Under the film and digital media content production tax credit program, the New Jersey Economic Development Authority awards corporation business tax and gross income tax credits to eligible taxpayers based on the qualified film production expenses or qualified digital media content production expenses incurred for use within certain parts of the State. In addition to certain other eligibility requirements, at least 50 percent of the qualified digital media content production expenses incurred by a taxpayer are required to be for wages and salaries paid to full-time or full-time equivalent employees in New Jersey in order to qualify for the digital media content production tax credit. Under current law, the terms "qualified film production expenses" and "qualified digital media content production expenses" are defined to include, among other expenses, the wages and salaries paid to individuals who are employed for the purposes of the production and who are subject to the tax imposed by the "New Jersey Gross Income Tax Act." Current law also defines the term "full-time or full-time equivalent employee" to include persons working not less than 35 hours per week, or other standard of service accepted by custom or practice as full-time or full-time equivalent employment, and whose wages and salaries are subject to withholding as provided in the "New Jersey Gross Income Tax Act." This bill expands the scope of qualified film production expenses and qualified digital media content production expenses to include wages and salaries that are paid to individuals who are employed for the purposes of the production and who are not subject to tax under the "New Jersey Gross Income Tax Act" due to the provisions of a tax reciprocity agreement with another state. The bill also provides that these expenses would include any payments made by the taxpayer to a loan out company for services performed in New Jersey by individuals who are employed by the loan out company and whose wages and salaries are not subject to tax under the "New Jersey Gross Income Tax Act" due to the provisions of a tax reciprocity agreement with another state. Additionally, the bill amends the definition "full-time or full-time equivalent employee" to include otherwise eligible persons whose wages and salaries are not subject to tax under the "New Jersey Gross Income Tax Act" due to the provisions of a tax reciprocity agreement with another state. Currently, the State has entered into a reciprocal income tax agreement with the Commonwealth of Pennsylvania. Under the terms of this agreement, compensation paid to Pennsylvania residents who are employed in New Jersey is not subject to tax under the "New Jersey Gross Income Tax Act." Accordingly, the bill provides that wages and salaries paid to certain Pennsylvania residents may be included as qualified film production expenses and qualified digital media content production expenses, provided that these persons are employed in the New Jersey for the purposes of the film or digital media content production. The provisions of this bill would take effect immediately and apply retroactively beginning on January 1, 2024 to any taxpayer who has not received a tax credit certificate or tax credit transfer certificate from the New Jersey Economic Development Authority before this date. However, any taxpayer that has previously received a tax credit certificate, but has not used such tax credit certificate before January 1, 2024, would be allowed to surrender the tax credit certificate to the authority and receive a new tax credit certificate in accordance with the provisions of this bill.

Committee Categories

Margie Donlon (D)*,  Vin Gopal (D)*,  John McKeon (D)*,  Eliana Pintor Marin (D)*,  Benjie Wimberly (D)*,  Garnet Hall (D),  Gordon Johnson (D),  Angela Mcknight (D),  Cody Miller (D),  Paul Moriarty (D),  Raj Mukherji (D),  Carol Murphy (D),  Ellen Park (D),  Verlina Reynolds-Jackson (D),  Shanique Speight (D), 

Approved P.L.2024, c.33. (on 07/10/2024)

Official Document