The bill revises New Jersey's film and digital media content production tax credit program to expand eligibility for tax credits by including wages and salaries of individuals not subject to the New Jersey Gross Income Tax due to reciprocity agreements with other states. It amends existing laws to define key terms such as "New Jersey studio partner" and "qualified film production expenses," allowing for a broader range of expenses to be claimed. The tax credit rates are set at 40% for New Jersey studio partners and 35% for other production companies, with specific conditions regarding expenses incurred in New Jersey and the timing of principal photography. Additionally, the bill establishes a cumulative cap on tax credits available to different categories of taxpayers, with increased caps for studio partners and film-lease production companies in subsequent years.

Furthermore, the bill introduces provisions for tax credit transfer certificates, enabling taxpayers to sell or assign their credits to others, and mandates that taxpayers submit reports from independent certified public accountants to verify their claims. It clarifies that payments to loan-out companies for services performed in New Jersey qualify as expenses, even if the wages are exempt from New Jersey taxation. The bill also requires taxpayers to withhold a percentage from payments to these companies and independent contractors, treating these withholdings as part of their employer responsibilities. Overall, the bill aims to enhance New Jersey's attractiveness as a destination for film and digital media production by streamlining the tax credit process and ensuring compliance with state tax regulations.

Statutes affected:
Introduced: 54:10A-5.39, 54A:4-12