The bill amends New Jersey's Film and Digital Media Tax Credit Program to enhance tax incentives for film and digital media production. It introduces a tiered tax credit system, offering a 40% credit for qualified expenses incurred by New Jersey studio partners and film-lease production companies, while other taxpayers can receive a 35% credit. Additionally, a new 30% tax credit is established for digital media content production expenses, with specific conditions related to wages and salaries. The bill also increases tax credit percentages for post-production services and allows for tax credit transfer certificates, enabling taxpayers to sell or assign their credits. A diversity plan incentive is introduced, which can increase the tax credit by 4% if a taxpayer submits an accompanying diversity plan.

Moreover, the bill sets a cumulative cap of $30 million on the value of tax credits approved for each fiscal year from 2019 until 2040 and mandates a 6.37% withholding from payments to loan-out companies and independent contractors. It clarifies that qualified film production expenses can include payments to loan-out companies for services performed in New Jersey, even if the employees' wages are not subject to New Jersey tax due to reciprocity agreements. The legislation aims to bolster New Jersey's position as a film and digital media production hub by providing clearer guidelines and financial incentives, ultimately promoting economic growth and job creation in the industry. The act is set to take effect immediately and will apply retroactively from January 1, 2024, for eligible taxpayers.

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