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New Jersey Film and TV Tax Credit Returns

After three years in the dark, New Jersey’s film and television production tax credit has officially returned.

In May, the Garden State’s newly elected Gov. Phil Murphy vowed to restore the tax incentive. At a Montclair Film forum in Montclair, N.J., the state’s Motion Picture and Television Commission associate director, David W. Schoner confirmed that the governor had fulfilled his promise. New Jersey’s television production tax incentive was signed into law on July 3 for the fiscal year 2019.

On Monday, Schoner was at Montclair Film’s Cinema 505, the organization’s home base, to discuss the credit’s updated terms and conditions with various New Jersey and New York film and television production workers.

According to Schoner, the New Jersey Economic Development Authority has approved a program that credits of $75 million per fiscal year to film and television projects. There is a $10 million yearly cap per project/series.

“The thought process was we didn’t want ‘Batman 57’ coming in and using up $65 million in a year,” Schoner said of the cap. “Instead, you could have possibly seven television series using seven different crews and seven different vendors all at one time compared to having one big show or movie taking up all of the money.”

In 2005, the Garden State created a $10 million dollar tax credit offering at 20% to boost film production throughout New Jersey. But in 2010, Christie suspended the incentive due to his dislike of the MTV reality show “Jersey Shore.” While “Jersey Shore” didn’t necessarily place the state in the best light, Tax Credits Intl.’s Christine Peluso said in 2014 that the series provided an undeniable economic boost: Parking meter fee collection in the show’s Seaside Heights setting jumped from $807,000 in 2007 to $1.3 million in 2010. In addition, Peluso noted the reality show’s crew and fans helped the local economy with the purchase of hotel rooms, car rentals, catering, hardware, dry cleaning, rental fees and permit fees, among other expenses.

A 2016 bill titled the Garden State Film and Digital Media Jobs Act attempted to reauthorize and revise the state’s expired film tax credit programs. The measure, approved by legislators from both parties, proposed an increase of the annual program cap from $10 million to $50 million. Christie vetoed the bill.

Under the new credit production companies may be eligible to receive a fully refundable credit of 30%, as opposed to the previous incentive’s 20%, of qualified production costs and post-production costs incurred in New Jersey.

In seven southern counties including Atlantic, Camden, Gloucester, and Salem the fully refundable credit will be 35%.

“The philosophy was if you offer a little more it would incentivize filmmakers to go to a part of the state that they typically don’t go to,” Schoner explained.

An additional 2% will be given if the crew meets diversity standards, which the state’s Economic Development Authority is still establishing. Above the line costs are included, but the salaries of highly compensated individuals are capped at $500,000 per person.

Schoner called the new program “radically different” from the previous program.

In addition to increasing the incentives yearly cap from $10 million to $75 million, one other major difference is that a project or series’ principal photography must start approximately within 180 days of the original date of application or within 150 days of approval of application.

“One of the issues under the previous program was once you (got approved) and put your film in the queue you might not make that film for three years and those funds were therefore tied up” Schoner said. “So it was decided that if you apply you have to start within a certain time period. If you don’t start within a certain time you automatically take out of the queue.”

Schoner assured the crowd that neither Murphy nor his staff would be judging projects that are made under the new incentive.

“We are not arbiters of taste,” Schoner said. “We are just (determining) if the project is complete so they can receive the tax credit.”

Under the new incentive, “Jersey Shore” and reality shows like it will not qualify for funds. To be eligible, a reality show’s production company must own or lease a New Jersey-based production facility of at least 20,000 square feet for a minimum of 24 months and invest at least $3 million in the facility, which must be located in a designated urban enterprise zone.

In order to qualify for the new incentive, a production company must spend 60% of their total budget in New Jersey (not including post-production costs) or a minimum of $1 million. In addition, projects must exceed 22 minutes in length and be intended for national or international distribution.

News shows, current events programming, weather and market reports, talk shows, sporting events and corporate/sales films will not be eligible for the credit.

Schoner was adamant that Jersey’s film and television tax credit is not competing with New York’s $420 million film incentive.

“We are not competing with New York, California or Georgia,” he said. “We are our own state. We aren’t stealing business from any other state. Productions are coming here that are original and didn’t emigrate from any place else.”

Applications, which are currently unavailable, will be considered on a first come, first serve basis.

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