LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 4448
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 3, 2024
SUMMARY
Synopsis: Revises various provisions of film and digital media content
production tax credit program.
Type of Impact: Annual State revenue decrease to the General Fund and Property Tax
Relief Fund.
Agencies Affected: New Jersey Economic Development Authority. Department of the
Treasury.
Office of Legislative Services Estimate
Fiscal Impact FY 2024 FY 2025 through FY 2039
Direct State Revenue Loss No Impact Indeterminate
 The Office of Legislative Services (OLS) determines that the bill will have an indeterminate
impact on State revenues. While expanding the film and digital media content production tax
credit program to include certain wages paid to nonresident employees as qualified expenses
will likely decrease revenues, other changes such as reallocating unused tax credits from other
programs to the film tax credit program and modifying certain eligibility criteria may increase
or decrease revenue losses depending on taxpayer behavior. The amount of the State revenue
loss is indeterminate and will depend on the number of taxpayers claiming the enhanced tax
credits and the proportion of their qualified expenses attributable to compensation paid to
employees not subject to New Jersey gross income tax due to reciprocity agreements with other
states.
 The magnitude of the revenue impact will depend on several factors, including the number of
taxpayers claiming the enhanced tax credits, the proportion of their qualified expenses
attributable to compensation paid to employees not subject to New Jersey gross income tax
due to reciprocity agreements, the amount of unused tax credits from other incentive programs
that are reallocated to the film tax credit program, and the extent to which taxpayers modify
their activities in response to the bill's provisions.
 By allowing wages paid to certain out-of-state residents, such as Pennsylvania residents
employed in New Jersey, to be included as qualified expenses, the bill will likely increase the
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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total amount of tax credits awarded to taxpayers that employ these individuals in the production
of films or digital media content in the State.
BILL DESCRIPTION
This bill amends certain provisions of law governing the Film and Digital Media Tax Credit
Program to expand the scope of qualified film production expenses and qualified digital media
content production expenses to include wages and salaries paid to nonresident employees who are
not subject to New Jersey gross income tax due to a reciprocity agreement with another state, such
as Pennsylvania. The bill provides that these expenses would include payments made by a
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 subject to withholding but
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 of “full-time
or full-time equivalent employee” under the tax credit program to include otherwise eligible
individuals 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.
The bill also makes several other changes to the Film and Digital Media Tax Credit Program.
It allows unused tax credits from the Aspire and Emerge programs to be made available for the
provision of film tax credits to a broader range of taxpayers, subject to certain limitations. The
bill modifies eligibility requirements for reality shows and the calculation of digital media content
production expenses. It allows certain digital media content production expenses incurred for post-
production services to qualify for enhanced tax credit percentages.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will have an indeterminate impact on State revenues.
Expanding the tax credit program to allow wages paid to certain nonresident employees,
particularly Pennsylvania residents, to be included as qualified film and digital media content
production expenses will likely increase the total amount of expenses that are eligible for tax
credits. This change would result in larger tax credit amounts being awarded, leading to greater
revenue losses, holding all other factors constant.
The OLS notes that, under the bill, unused tax credits from the Aspire and Emerge programs
are to be made available for taxpayers receiving credits under the film tax credit program, subject
to certain limitations. The bill also makes various modifications to the definitions and eligibility
criteria under the film tax credit program, which could affect taxpayer behavior and the types of
expenses that qualify. Depending on how taxpayers respond, these changes may serve to increase
or decrease the amount of credits awarded.
Therefore, the net effect of the bill on State revenues is uncertain, as it will depend on the
interactions between the expansion of eligible expenses, the reallocation of unused credits from
other programs, and taxpayer response to the modified program requirements. More information
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would be needed on the potential credit amounts involved and taxpayer behavior to quantify the
revenue impact with greater certainty.
Section: Revenue, Finance, and Appropriations
Analyst: Patrick Walsh
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


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