New Jersey Bolsters Tax Credits For Digital Media, Follows Incentives For Film And Television
NJ Gov. Phil Murphy has signed legislation to expand tax credits for digital media production as part of a push to draw new business to the state following his incentives for film and television.
Murphy launched a tax credit regime for film and TV in 2018 and expanded it in 2020. It’s boosted production, attracting projects like West Side Story, The Equalizer and The Many Saints of Newark. This latest law gives the same treatment to digital media, which it didn’t define but can include a range of content from entertainment websites and digital publishing to video games. Leading digital businesses in the state include the NBC Universal Digital Media Campus in Englewood Cliffs (where CNBC is headquartered) and Audible, owned by Amazon, which is based in Newark.
The new legislation boosts the portion of the tax credit program allocated to digital media content to 30% of qualified spending in state and 35% in specific counties (Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, or Salem). It also increases the cumulative annual limitation on digital media content production tax credits to $30 million from $10 million.
“Digital media projects are just as important to the entertainment industry and economy as film projects, and deserve the same opportunities to grow and thrive in our state,” said State Senator Gordon Johnson, a sponsor of the legislation. “This law will give New Jersey an even more competitive edge by further establishing our state as an appealing destination for creative projects of all kinds.”
The new legislation didn’t really tinker with film and TV credits, which are still set at 30% or 35% depending on location plus an evolving 2%-4% “diversity bonus.” The one new element in film/TV is that starting in fiscal 2025, the state will allocate an additional $100 million in tax credits for New Jersey’s film-lease partners (companies that lease 50,000 square feet of space).
NJ currently has $100 million each earmarked for three designations of producers — film-lease partners, studio partners (companies that lease 50,000 square feet of space) and one-off productions. The first two were developed last January to spur studio development. The new law makes it easier shift funds from film-lease partners to the other two categories.
The specifics will be released in March.
Overall, the New Jersey Film & Digital Media Tax Credit Program, “will ensure that our state remains a top destination for some of our country’s most significant film and TV productions,” Murphy said.
New Jersey is strategically located, between New York and Philadelphia. Being in NYC’s backyard, it has its fair share of skilled industry labor. “But convenience is nothing if it doesn’t also make financial sense to attract the business activity,” said State Senator Paul Sarlo, another backer. “By increasing the credits of these programs and enhancing the financial incentive to support the film industry and digital media in our state we can solidify New Jersey as a go-to destination for these projects.”
Attracting new business is especially key as the state continues to recover from the challenges of the Covid-19 pandemic, lawmakers noted.
The MPA also weighed in: “Governor Murphy led the way to enact 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 over $2 billion in wages,” said chairman-CEO Charles Rivkin in a statement. “That program grows stronger with new enhancements signed into law last night which will create more jobs in the state and investment into the New Jersey economy. I applaud Governor Murphy for his continued leadership, and all the champions of the creative economy in the legislature for expanding New Jersey’s production incentive program.”