Film Production Tax Credit

Incentive Alert: NJEDA Releases Application for NJ Film Tax Credit Program

Film Production.jpg

On Monday, December 17, 2018, the New Jersey Economic Development Authority (NJEDA) released the much-awaited application for the NJ Film Tax Credit Program.

Created by legislation passed earlier this year, the Film & Digital Media Tax Credit Program will allow for taxpayers (in most cases, production companies) to seek a tax credit for qualified film production and digital media content production expenses. Applications will be approved by the New Jersey Economic Development Authority (NJEDA) and the Director of the Division of Taxation in the Department of the Treasury. Approved applicants are entitled to claim a credit against CBT or GIT liability in an amount equal to 30 percent (35 percent in limited cases) of the qualified film production expenses or 20 percent (25 percent in limited cases) of the qualified digital media content production expenses.

Importantly, the NJEDA only released the application for the film production component of the program. The digital media application is expected to be released in January 2019.

The full press release from the NJEDA can be found here: https://www.njeda.com/filmtaxcreditapplicationrelease

If interested in learning more this program or any other economic incentive program, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.   

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


New Jersey Incentive Update - November 2018

Jersey City Skyline.jpg

This morning, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting. Among the actions to be taken, the Board will adopt new rules for the Film & Digital Media Tax Credit Program, and consider three applications under the Grow New Jersey Assistance Program (Grow NJ).

Created by legislation passed earlier this year, the Film & Digital Media Tax Credit Program will allow for taxpayers (in most cases, production companies) to seek a tax credit for qualified film production and digital media content production expenses. Applications will be approved by the New Jersey Economic Development Authority (NJEDA) and the Director of the Division of Taxation in the Department of the Treasury. Approved applicants are entitled to claim a credit against CBT or GIT liability in an amount equal to 30 percent (35 percent in limited cases) of the qualified film production expenses or 20 percent (25 percent in limited cases) of the qualified digital media content production expenses.

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 250 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 250 projects will drive over $4.5 billion in private capital investment, create over 32,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about these programs, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.  

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.


Incentive Alert: Film Tax Credit Legislation Advances in New Jersey Senate

Trenton Picture.jpg

Last week, the Senate Budget and Appropriations Committee voted 11-1 to advance the “Garden State Film and Digital Media Jobs Act.” As amended, the bill provides a credit against the corporation business tax (CBT) and the gross income tax (GIT) for certain expenses incurred for the production of certain films and digital media content in the State.

Under the bill (S122), applications approved by the New Jersey Economic Development Authority (NJEDA) and the Director of the Division of Taxation in the Department of the Treasury, may entitle a taxpayer to claim a credit against CBT or GIT liability in an amount equal to 30 percent (35 percent in limited cases) of the qualified film production expenses or 20 percent (25 percent in limited cases) of the qualified digital media content production expenses.

Historically, New Jersey has utilized tax credits to incentivize film and media production projects. Following the prior program’s expiration a year earlier, in 2016, Governor Christie vetoed a bill that would have created a film and media tax credit program.

On the other side of the river, New York’s Film Production Tax Credit program (NYS Tax Law § 24) has been wildly successful in attracting film production to New York and creating film industry-related jobs throughout the State. The program provides certain tax incentives to companies that produce qualified feature films, television movies, and television series and pilots in New York State, and/or incur post-production costs in the State associated with the original creation of such productions.  

While it is certainly too early to tell if the Garden State Film and Digital Media Jobs Act will become law, this is definitely a step in the right direction.

If interested in learning more about this or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com. 

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

 

New York Extends Film Production Tax Credit

On April 10, 2017, New York Governor Andrew Cuomo signed into law the state budget for the 2018 fiscal year. Among many other things, the budget extends New York’s incentive program for the film industry for three years, to 2022. The program had been set to expire in 2019.

An important economic development tool, New York’s Film Production Tax Credit program (NYS Tax Law § 24) has been wildly successful in attracting film production to New York and creating film industry-related jobs throughout the State. The program provides certain tax incentives to companies that produce qualified feature films, television movies, and television series and pilots in New York State, and/or incur post-production costs in the State associated with the original creation of such productions. The 2018 budget continues to allocate $420 million per year for tax credits for the program (up to $25 million of which may be dedicated to encourage the growth of post-production industry in New York).    

Under the Film Production Tax Credit program, film production companies may be eligible to receive a tax credit of 30% on qualified production and/or post-production costs incurred in New York State. An additional 10% tax credit is available on qualified labor expenses incurred in certain upstate counties, and a 5% increase in the tax credit is available for post-production costs incurred in upstate New York. To qualify for the production tax credit, a production company must film a substantial portion of the project in New York. The post-production tax credit is available where the project was filmed predominantly outside of New York, but the film production company contracts for the post-production work to be undertaken by a company in New York.

On the other side of the Hudson, New Jersey’s film production tax credit program remains in limbo—at least for now. Following the program’s expiration a year earlier, in 2016, Governor Christie vetoed the Garden State Film and Digital Media Jobs Act, which would have reinstated and enhanced the tax credits available in New Jersey for qualified film and digital media content production expenses, and revised and expanded film and digital media tax credit eligibility requirements. The legislation would have also required the New Jersey Economic Development Authority to study the prospect of developing a film production studio in North Jersey. The Garden State Film and Digital Media Jobs Act (S1053/A2562) had been reintroduced in the State Legislature, where it currently remains pending.     

MURPHY PARTNERS LLP

If interested in learning more about these and other economic development incentive programs, please do not hesitate to reach out to us by telephone at (973) 877-6984 or by email at info@murphyllp.com. In the meantime, please take some time to explore the website. We look forward to hearing from you soon.

Murphy Partners LLP is a boutique law firm specializing in governmental affairs, economic incentive advisory, and land use and redevelopment law. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal and government affairs services to meet the distinctive needs of our clients. Through the development of comprehensive legal and government affairs strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.