The state’s Economic Development Authority awarded its first round of tax breaks under the film tax incentive program, totaling over $6 million, in an effort to attract film, television and media production to New Jersey.
Gov. Phil Murphy signed the tax break program into law last summer. 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
Day 28 Films Liberty got the largest of the tax breaks at $3.2 million to help offset the costs of its production of the documentary “Gimme Liberty,” followed by Touchstone Television Productions which got a $2.4 million tax break for its production of the movie “Emergence,” which will be filmed in Kearny.
Besa Movie got a $469,794 tax incentive award for its production of the movie “Besa,” which wrapped up production in March, while The HKB Film got a $77,397 tax incentive for its production of “The Atlantic City Story.”
Film tax credits are capped at $75 million a year while digital media tax breaks are capped at $10 million a year.
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 the program lacks a net benefits test.
“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,” said Tim Sullivan, chief executive officer of the Economic Development Authority, which administers the program along with the New Jersey Motion Picture and Television Commission.