ASSEMBLY APPROPRIATIONS COMMITTEE
STATEMENT TO
ASSEMBLY, No. 6307
with committee amendments
STATE OF NEW JERSEY
DATED: JANUARY 8, 2026
The Assembly Appropriations Committee reports favorably and with committee amendments Assembly Bill No. 6307.
As amended, this bill modifies certain provisions of the film and digital media content production tax credit program (“program”) administered by the New Jersey Economic Development Authority (“authority”). Among other changes, this bill modifies the types of costs that may qualify as qualified film production expenses or qualified digital media content production expenses under the program.
Modifications to Qualified Film Production Expenses
Current law includes deferred compensation, including advances on deferred compensation, provided to individuals employed in the production of a film within the definition of qualified film production expenses incurred by a New Jersey studio partner. Current law also allows a portion of the wages, salaries, or other compensation paid for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, to be included in the calculation of qualified film production expenses, with different thresholds authorized for certain New Jersey studio partners and New Jersey film-lease production companies.
Under current law, the qualified film production expenses of a New Jersey studio partner, or a New Jersey film-lease production company that enters into a lease to occupy a New Jersey film-lease partner facility for at least three years, may include certain expenses, including out-of-State producer fees and script costs, in proportion to the percentage of principal photography shoot days in the State. The bill amends current law to clarify that these out-of-State producer fees would not include producer fees received for services performed in the State that already qualify as qualified film production expenses. The bill also provides that out-of-State producer fees incurred outside the State and script costs written outside the State would qualify as qualified film production expenses even if New Jersey gross income taxes were not withheld from wages, salaries, or other compensation paid or incurred for such services.
In addition, the bill amends current law to provide that cumulative expenses for production insurance premiums, rights fees, and out-of-State producer fees, excluding producer fees received for services performed in the State that already qualify as qualified film production expenses, cannot exceed 7.5 percent of qualified film production expenses for any New Jersey studio partner or New Jersey film-lease production company. The bill also provides that total out-of-State producer fees, rights fees, script costs, insurance premiums, and excess amounts paid to highly compensated individuals are to be included for the purpose of calculating the total amount of qualified film production expenses subject to the 7.5 percent limitation.
The bill further amends current law to clarify that a New Jersey studio partner that incurs $125 million or more in qualified film production expenses in the State may include within qualified film production expenses: in excess of amounts paid to highly compensated individuals, up to $72 million on certain wages and salaries; deferred compensation, including advances on deferred compensation; and script costs. Under current law, this enhancement to qualified film production expenses is only available to a New Jersey studio partner that incurs $125 million or more in qualified film production expenses in the State for the production of a feature film. The bill removes the limitation of this benefit to the production of a film that is a feature film.
Inclusion of Additional Expenses
Current law allows a film production company to apply for designation as a New Jersey studio partner. To receive designation as a New Jersey studio partner, an applicant is to be a film production company that has site control of a production facility that is at least 250,000 square feet for at least ten years. A New Jersey studio partner may include certain additional wage and salary expenses in the calculation of its tax credit, depending on the value of qualified film production costs incurred for a project.
The bill amends current law to allow a taxpayer to include, as part of its initial application for a tax credit, expenses that would not constitute qualified film production expenses if the taxpayer was not designated as a New Jersey studio partner. The bill requires the authority to approve the inclusion of these expenses in the tax credit award, so long as the New Jersey studio partner’s application complies with all other requirements of current law.
Prohibitions on Recapture of Tax Credits
Current law requires a taxpayer that is designated as a New Jersey film-lease post-production company, New Jersey film-lease production company, or a New Jersey studio partner to occupy the production facility developed, purchased, or leased as a condition of such designation for the commitment period. If the authority determines that this condition is not met, the authority is required to recapture certain portions of the tax credit. However, current law also provides an exception to this recapture provision in any circumstance in which the failure to occupy is due to any reason outside the control of a New Jersey studio partner.
This bill amends current law to further clarify that if the failure to occupy is due to any reason outside the control of the New Jersey studio partner, the authority may not recapture any tax credits issued to the taxpayer, or reduce any portion of the tax credit awarded to the taxpayer before the failure to occupy by virtue of designation as a New Jersey studio partner. The bill also allows a New Jersey studio partner to diligently seek a production facility without forfeiting its designation as a New Jersey studio partner.
The bill amends current law to define “reason outside the control of” to mean an event or action related to the production facility, which the New Jersey film-lease post-production company, New Jersey film-lease production company, or New Jersey studio partner occupies, beyond the approved applicant’s control that occurred without its fault or negligence, and for which the approved applicant has made good faith efforts to prevent, avoid, mitigate, or overcome the event or action, provided that the approved applicant proceeds in good faith and with due diligence to fulfill its obligations under the program, to the extent possible. An event or action that is a “reason outside the control” of an approved applicant includes, but is not limited to: the failure of an approved applicant’s landlord to timely deliver a temporary or final certificate of occupancy or operate the production facility, or the landlord’s material breach of the production facility lease with the approved applicant.
Current law prohibits the recapture of any tax credits within one year of the date of a New Jersey studio partner's lease with a New Jersey film-lease production facility, which period may be extended for an additional year by the authority. This bill amends current law to prohibit the authority during the same period from recapturing or reducing the portion of any tax credits available to the taxpayer only by virtue of such designation as a New Jersey film-lease post-production company, New Jersey film-lease production company, or New Jersey studio partner, including, but not limited to, tax credits awarded for any film production for which an initial application was submitted to and deemed complete by the authority.
Designation as a New Jersey Film-Lease Parter Facility
Current law provides that if a film production company designated as a New Jersey studio partner ceases to qualify for that designation, it may apply for designation as a New Jersey film-lease partner facility. The bill amends current law to require the authority, upon the issuance of a New Jersey film-lease partner designation to the film production company, to reduce the number of available film-lease partner facility designations.
Current law also provides that no more than three New Jersey production facilities may be designated as a New Jersey film-lease production facility but excludes from that limitation production facilities, or portions thereof, owned, built, leased, or operated by a film production company designated as a New Jersey studio partner.
To be eligible for designation as a New Jersey film-lease partner facility, an applicant is required to commit to owning, leasing, or operating a production facility of at least 250,000 square feet for a period of five or more consecutive years. The bill amends current law to permit the authority to revoke a New Jersey film-lease partner facility designation, and recapture a portion of the tax credits available to a New Jersey film-lease production company or New Jersey film-lease post-production company due to its designation as a New Jerey film-lease partner facility, if a New Jersey film-lease partner facility fails to satisfy the conditions for designation as a New Jersey film-lease partner facility for: (1) a period of at least five years following the year in which the production facility is designated as a New Jersey film-lease partner facility; or (2) the duration of any lease of the New Jerey film-lease partner facility by a New Jersey film-lease production company or New Jersey film-lease post-production company, which lease has a term of at least three years of occupancy and includes at least 36,000 square feet of gross rentable space.
New Jersey Film-Lease Production Company
The bill amends current law to clarify the definition of "New Jersey film-lease production company." Specifically, in addition to other requirements, a taxpayer may qualify as a New Jersey film-lease production company if it is a member of a combined group or any other entity. The bill specifies that any other entity includes a fund and may include any other entity in which a fund has a material ownership interest if the film-lease production company is materially owned by the fund.
The bill also clarifies that a lease of not less than three years described in the definition of "New Jersey film-lease production company" is required to satisfy the requirements for a lease of not less than three years described in the definition of "New Jersey film-lease post-production company."
Credit for Hiring Residents of Certain Areas in the State
Current law allows a taxpayer who is eligible for tax credits under the program to receive an additional credit in an amount equal to four percent of film production expenses or digital media content production expenses if the application for a tax credit is accompanied by a plan outlining specific goals, which may include advertising and recruitment actions, for hiring residents of an economically disadvantaged area in the State, a distressed municipality, or land owned by the federal government on or before December 31, 2005 (“eligible areas”).
The bill amends current law to require that the specific goals outlined in the plan include hiring at least 25 percent of the employees working in New Jersey, including, but not limited to, extras, but excluding independent contractors, who are residents of these eligible areas.
Tax Credits Previously Earned for a Diversity Plan
Prior to a recent enactment of law, P.L.2025, c.81, an additional tax credit was available for taxpayers that submitted a diversity plan at the time of application that outlined specific goals for hiring minority persons and women. That prior additional credit was available in an amount equal to two percent of qualified film production expenses or four percent of the digital media content production expenses of the taxpayer during a privilege period. It was possible to receive four percent of qualified film production expenses if certain additional conditions were met.
With the enactment of P.L.2025, c.81, the Legislature amended P.L.2018, c.56, which modified certain provisions related to the additional diversity credit, a four percent additional credit upon the submission of a plan outlining specific goals for hiring residents of eligible areas.
This bill clarifies that any taxpayer that has satisfied the requirements of section 4 of P.L.2018, c.56, including the submission and approval of a diversity plan by no later than 30 days after the bill's effective date, remains eligible for tax credits earned pursuant to the prior structure.
Eligibility for Multiple Additional Credits
Current law allows an additional promotional tax credit for certain film productions in an amount equal to four percent of a taxpayer’s qualified film production expenses or qualified digital media content production expenses under certain conditions. A New Jersey studio partner or New Jersey film lease production company may qualify for this additional credit by submitting, alongside an application to the authority and the Director of the Division of Taxation in the Department of the Treasury (director), a plan outlining specific goals to promote or invest in New Jersey.
The bill amends current law to allow any taxpayer that receives an additional tax credit of up to four percent due to a diversity plan or hiring plan pursuant to section 4 of P.L.2018, c.56, as described above, may also qualify for an additional tax credit by submitting, alongside an application to the authority and the director, a plan outlining specific goals to promote or invest in New Jersey. This additional tax credit would be in an amount equal to one percent of the qualified film production expenses or qualified digital media content production expenses of the taxpayer.
Similarly, if a taxpayer receives an additional tax credit for a plan outlining specific goals to promote or invest in New Jersey, the taxpayer may also qualify for an additional tax credit of up to four percent due to a diversity plan or hiring plan, pursuant to section 4 of P.L.2018, c.56.
A taxpayer may receive up to a total of five percent of qualified film production expenses or qualified digital media content production expenses in additional tax credits under these provisions.
State Purchase of Tax Credits
Current law requires the director to purchase unused tax credits and tax credit transfer certificates awarded under the program in an amount equal to 95 percent of the value of the tax credit, if certain conditions are met.
One of those conditions requires the annual appropriations act for the State fiscal year to maintain a budgetary surplus of no less than 12 percent of total appropriations from the General Fund and the Property Tax Relief Fund. This bill amends current law to require only that the appropriations act for the fiscal year maintain a budgetary surplus.
COMMITTEE AMENDMENTS:
The committee amended the bill to:
(1) clarify that a lease of at least three years described in the definition of "New Jersey film-lease production company" is required to satisfy the requirements for a lease of at least three years described in the definition of "New Jersey film-lease post-production company";
(2) permit a New Jersey film-lease production company to include any other entity in which a fund has a material ownership interest if the film-lease production company is materially owned by the fund;
(3) prohibit the authority from recapturing or reducing the portion of certain tax credits available to the taxpayer only by virtue of such designation as a New Jersey film-lease post-production company, New Jersey film-lease production company, or New Jersey studio partner, including, but not limited to, tax credits awarded for any film production for which an initial application was submitted to and deemed complete by the authority during the first year after it enters a lease with a New Jersey film-lease production facility, which period may be extended for an additional year by the authority. Current law prohibits the recapture of any tax credits within one year of the date of the lease with a New Jersey film-lease production facility during the same period;
(4) remove language from the bill that would have added a requirement that the total amount of script costs, including script purchases, that constitutes qualified film production expenses incurred by a New Jersey film-lease production company or a New Jersey studio partner be in addition to the amounts paid to highly compensated individuals and the additional amounts paid to highly compensated individuals;
(5) clarify that total out-of-State producer fees, rights fees, script costs, insurance premiums, and excess amounts paid to highly compensated individuals are to be included for the purpose of calculating the total amount of qualified film production expenses subject to the 7.5 percent limitation on certain expenses;
(6) remove a provision in current law providing that certain additional amounts may only constitute qualified film production expenses for a New Jersey studio partner that incurs at least $125 million in qualified film production expenses in the State, which provision limits this benefit to the production of a film that is a feature film;
(7) revise the requirement that the specific goals outlined in the plan submitted for an additional tax credit include hiring at least 25 percent of the employees working in New Jersey to specify that this includes, but is not limited to, extras;
(8) require a taxpayer receiving an additional tax credit for the submission and approval of a diversity plan to have submitted its application to the authority no later than 30 days after the bill's effective date;
(9) remove a requirement that any amount of qualified film production expenses or qualified digital media production expenses used in the calculation of an additional tax credit for a diversity plan have occurred on or before the effective date of P.L.2025, c.81;
(10) provide that the bill's provisions apply retroactively to any designation approved after the effective date of the "New Jersey Economic Recovery Act of 2020" and to any application under the program for which tax credits have not yet been issued after the adoption of P.L.2025, c.81 but prior to the bill's effective date; and
(11) make technical amendments.
FISCAL IMPACT:
Fiscal information for this bill is currently unavailable.