THE INCENTIVES PROGRAM - TIP

On January 7, 2021, Governor Phil Murphy signed Assembly Bill 4, which amends the New Jersey Film and Digital Media Production Tax Credit as follows:

• Establishes annual funds of $100 million for New Jersey film partners and $100 million for New Jersey film-lease partners beginning fiscal year 2021 (7/1 – 6/30);
• Defines New Jersey film partner as a film production company that made a commitment to produce films in New Jersey and has developed, purchased, or executed a 10-year contract to lease a production facility of at least 250,000 square feet as a “transformative project”;
  • Provides special provisions for New Jersey film partners committed to producing films or commercial audiovisual products as follows:
    • Allows compensation for writers, directors, including music directors, producers, and performers to constitute qualified film production expenditures up to:
      • $15 million in the aggregate when production incurs more than $15 million, but less than $50 million in qualified production expenses;
      • $25 million in the aggregate when production incurs $50 million or more, but less than $100 million in qualified production expenses;
      • $40 million in the aggregate when production incurs $100 million or more, but less than $150 million in qualified production expenses; and,
      • $60 million in the aggregate when production incurs $150 million or more in qualified production expenses; and,
    • Limits the number of production companies that may be designated as a New Jersey film partner to five production companies;
• Defines New Jersey film-lease partner as:
  • Taxpayer that has made a commitment to lease or acquire a New Jersey production facility with an aggregate square footage of at least 50,000 square feet for a period of five or more successive years; and,
  • Commits to spend an annual average of $50 million in qualified production expenditures over at least five but not to exceed ten years; and,
• Establishes a separate sunset date of June 30, 2034 for the New Jersey film and the New Jersey film-lease partner

House Bill 1193 proposes to establish the Indiana Film and Media Production Expenditure Tax Credit program as follows:

• Creates a transferrable tax credit equal to a rate negotiated between the Indiana Destination Development Corporation (IDDC) and the applicant on total qualified Indiana spend and labor;
•  Requirements:
  • Meet minimum spend of:
    • $500,000 in qualified production expenditures for a qualifying media production that is not an animation project or music recording; or,
    • $100,000 in qualified production expenditures for an animation project or music recording;
  • At least 50% of the total expenses incurred in direct production expenditures must be qualified Indiana production expenditures;
  • Pay an application fee at the time the application is submitted;
  • Obtain a completion bond if the project is a feature length film or documentary;
  • Commence production no later than 120 days after an agreement is executed between the IDDC and the applicant if executed before January 1, 2023—90 days if an agreement is executed on or after January 1, 2023;
  • Pay a final administrative review fee in an amount determined by IDDC no later than ten days after the agreement is executed;
  • Include the statement “Filmed in Indiana” and an approved logo in the end credits; and,
  • Must agree to the review and audit of qualified expenditures by the Film Commissioner; and,
• Establishes a sunset date of December 31, 2029.

Assembly Bill 1120 proposes to amend the Empire State Film Production tax credit program as follows:

• Adds areas within the counties of Rockland and Westchester that are not located within the film zone to the list of counties and areas that qualify for an additional 10 percent of qualified wages paid to individuals; and,
• Defines the “film zone” to mean the area within a 25-mile radius of Columbus Circle in the borough of Manhattan.

If passed, this act would take effect immediately.

Assembly Bill 1275 proposes to amend the Empire State Film Production tax credit program as follows:

• Increases the annual funding allocated to the additional 10 percent wage credit to $15 million, previously $5 million.

If passed, the Act shall take effect April 1, 2022.

House Bill 1800 and Senate Bill 1100 propose to amend the Governor’s Motion Picture Opportunity Fund (Discretionary grant program) as follows:

• Decreases the biennium funding for the period ending June 30, 2022 from $8 million to $6 million, allocated as follows:
  • $3 million for the fiscal year ending June 30, 2021; and,
  • $3 million for the fiscal year ending June 30, 2022.