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 40% tax credit for qualified production expenses incurred by designated New Jersey studio partners and film-lease production companies, while other taxpayers can receive a 35% credit. The legislation mandates that at least 60% of total production expenses must be spent on services and goods purchased in New Jersey, and it includes provisions for marketing materials that promote New Jersey as a film destination. Additionally, the bill establishes a 30% tax credit for digital media content production, with potential increases for post-production services at New Jersey facilities, contingent upon meeting specific conditions.

Significant changes include the introduction of tax credit transfer certificates, allowing taxpayers to sell or assign their credits, and cumulative limits on the total amount of tax credits available for different taxpayer categories. The bill also clarifies the responsibilities of taxpayers regarding withholding taxes from payments to loan-out companies and independent contractors, specifying a withholding rate of 6.37%. Furthermore, it expands the definition of qualified expenses to include wages for employees not subject to New Jersey income tax due to reciprocity agreements, and it outlines the authority's discretion in managing tax credit allocations and rescinding designations for facilities that fail to meet qualifications. Overall, the legislation aims to bolster New Jersey's appeal as a film production hub by providing more flexible and accessible tax incentives.

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