The state’s Economic Development Authority awarded its second round of film tax breaks under the newly created program – a $583,857 award to Viacom International Media Networks for its production last year in Newark of the “Black Girls Rock!” awards show.
Viacom spent $4.5 million on the August 2018 production – $1.9 million of which was spent on New Jersey-based vendors, for which the media giant won the incentives.
“Black Girls Rock!” includes such award categories as “The Rock Star Award,” Social Humanitarian,” Motivator” and “Young, Gifted,” according to the EDA.
In June, the EDA approved its first round of film tax breaks—$6 million spanning four separate awards.
Film tax credits are capped at $75 million a year while digital media tax breaks are capped at $10 million a year. The credits cover up to 30 percent of expenses for film productions between 2019 and 2023, or 35 percent if they film in South Jersey. Digital companies can apply for tax breaks up to 20 percent, or 25 percent if they set up shop in South Jersey.
Opponents of the program worry that the state could bleed out money over time because the program lacks a net benefits test, which is a formula the state uses to figure out how the money the state spends on tax breaks for a company is exceeded by the amount of economic activity that the business generates for the state.
An analysis last year from the nonpartisan Office of Legislative Services found that the state could lose $425 million in revenue over the life of the program, or $85 million a year, because it lacks a net benefits test.
But supporters of the program argue the costs will be far exceeded by the business and economic activity that the incentives generate.
“Film and television production offers many economic benefits including new jobs and support for local small businesses, and this powerful incentive, along with New Jersey’s diverse population and landscapes, make a compelling case to producers that New Jersey is the ideal place for their next project,” EDA Chief Executive Officer Tim Sullivan said in a statement.