NJEDA approves film tax breaks for 3 more producers filming during COVID

Daniel J. Munoz//May 12, 2021//

NJEDA approves film tax breaks for 3 more producers filming during COVID

Daniel J. Munoz//May 12, 2021//

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The New Jersey Economic Development Authority on May 12 approved the second round of awards for film and media productions during the COVID-19 pandemic under a lucrative and popular tax break program meant to lure the film and television industry to the state.

This latest totaled $1.6 million, according to the NJEDA’s Wednesday board agenda, following a round of $1.32 million in tax breaks approved under the program in March.

Known formally as the NJ Film and Digital Media Tax Credit Program, the state has leveraged the incentive to attract renowned productions such as West Side Story, A Plot Against America, The Enemy Within, Army of the Dead, Joker and The Trial of the Chicago 7.

But the COVID-19 pandemic and the high risk of transmission, combined with a litany of mitigation protocols in effect under the Murphy administration and by the film production unions, ground most production to a halt in 2020.

“2020 was going to exceed that,” Steven Gorelick, executive director of the New Jersey Motion Picture and Television Commission, said in an October interview. “Going into March, we had three network series already about to film, and then the pandemic hit and all production stopped. Everywhere. Across the globe.”

As of Feb. 23, the NJEDA awarded nearly $104 million in tax breaks to 30 projects since the formal launch of the program.

The film set of Sanctioning Evil, due out sometime in 2021.. - SINCLAIR YOON PHOTOGRAPHY
The film set of Sanctioning Evil, due out sometime in 2021. – SINCLAIR YOON PHOTOGRAPHY

Just a slither of that was after March 2020, when the first case of COVID-19 in the state was detected and Gov. Phil Murphy ordered a slew of lockdown measures in a bid to halt the spread of the virus.

Fourteen of those 30 projects were approved after March 2020, most of them for productions finished prior to the pandemic.

In 2019, the program saw demand outstrip available funding.

Under the program, film projects can be awarded a tax break equaling 30% of production costs or 35% for filming in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem counties. In January, Murphy approved an expansion of the program from $75 million to $100 million a year for film and TV, though digital media projects are still capped at $10 million.

But usage of the tax credits plummeted in 2020. The NJEDA, which awards the breaks and monitors compliance, had $150 million of tax breaks it could award over the program during the 2020 fiscal year, $50 million of which carried over from the previous year, as permitted by state law.

Just over half of the available credits – $64.3 million – were not awarded.

To that end, the NJEDA on May 12 voted to carry over $10 million of unused digital media tax credits to this coming year, which would double the program size to $20 million.

Many film producers NJBIZ interviewed outlined a slew of mitigation efforts to keep production going while protecting their dozens or hundreds of crew members against the pandemic.

Nonetheless, the $14.5 billion incentive package Murphy approved in January includes $2.5 billion toward an expanded form of the tax credit program over a 13-year period.

What was approved

The NJEDA approved a $559,428 tax break to Eye on the Ball Enterprises, for its production of the first season of the TV series “Severance,” which follows the life of a widower following a strange and life-altering surgical procedure. The movie was shot in Holmdel and filming started in November with an end date of June 15, according to the board agenda.

A second award for $295,275.80 was given to Metropark LLC for its production of the second season of “Metropark,” a sitcom series that follows the life of an Indian-American family living in the fictional town of Metro Park, which boasts an Indian-majority population. It’s closely based on the real-life community of Iselin, where the Metropark train station is located, and which alongside parts of northern Edison boasts one of the largest Indian-American communities in the country. Filming was done in North Brunswick – rather than Metropark itself – and ran from September to January.

A third award was granted for $812,419.43 to Red Hippo Productions for its production of “Death Saved My Life,” which follows the life of a woman who faked her own death to escape a hitman hired by her husband. Filming was done in Haddonfield and ran from November to February.