This bill amends New Jersey's Film and Digital Media Tax Credit Program by introducing a requirement that all original music and musical scores for film and digital media productions must be produced and recorded domestically within the United States or its territories. This stipulation is now a condition for taxpayers seeking tax credits for qualified production expenses, which remain at 40% for New Jersey studio partners and 35% for other taxpayers for film productions, while digital media content production expenses are eligible for a 30% credit. The bill also retains existing provisions regarding the tax credit verification process and the requirement for independent certified public accountants to prepare reports for taxpayers, ensuring that a certain percentage of production expenses is incurred within New Jersey.

Additionally, the bill establishes definitions and eligibility criteria for "New Jersey studio partners" and "New Jersey film-lease production companies," which must meet specific facility and operational requirements to qualify for tax credits. It allows for the transfer of tax credits between taxpayers and private purchasers, with a minimum of 75% of the transferred credit amount to be received. The bill clarifies what constitutes qualified expenses and includes provisions for withholding taxes from payments to loan-out companies and independent contractors. Notably, it deletes certain provisions related to compensation for highly compensated individuals, streamlining the criteria for tax credit eligibility. The act is set to take effect immediately and will apply to tax periods beginning after its enactment.

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