LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 4618
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 1, 2025
SUMMARY
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Synopsis: |
Modifies certain requirements and award availability under film and digital media content production tax credit program. |
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Type of Impact: |
Annual State revenue reduction. |
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Agencies Affected: |
New Jersey Economic Development Authority; Department of the Treasury. |
Office of Legislative Services Estimate
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Fiscal Impact |
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Annual State Revenue Reduction |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that the bill will result in indeterminate annual State revenue reductions, subject to maximum tax credit award caps across all program categories.
· The OLS notes that the actual fiscal impact will depend on application volume, project eligibility, and authority discretion in awarding credits.
BILL DESCRIPTION
The bill expands the film and digital media content production tax credit program administered by the New Jersey Economic Development Authority. Key provisions include extending program availability until July 1, 2050; restructuring tax credit percentages and award caps for New Jersey studio partners; creating additional tax credit categories for television series relocation, promotional activities, and economic development initiatives; expanding eligibility for certain post-production activities; and modifying recapture provisions and reporting requirements.
The bill establishes maximum annual tax credit award caps of: up to $550,000,000 for New Jersey studio partners; up to $400,000,000 for New Jersey film-lease production companies; up to $100,000,000 for other taxpayers; and up to $130,000,000 for digital media content production.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in indeterminate annual State revenue reductions, subject to maximum tax credit award caps across all program categories.
The bill maintains the existing maximum potential fiscal exposure for New Jersey studio partners at up to $550,000,000 annually, but restructures the allocation by increasing the base annual cap from $150,000,000 to $300,000,000 beginning in fiscal year 2026 while reducing discretionary awards from $400,000,000 to $250,000,000.
Maximum annual tax credit caps for other categories remain unchanged: up to $400,000,000 for New Jersey film-lease production companies consisting of $150,000,000 base plus $250,000,000 discretionary; up to $100,000,000 for other taxpayers; and up to $130,000,000 for digital media content production consisting of $30,000,000 base plus $100,000,000 discretionary.
The bill creates several new additional tax credit categories that operate within existing caps rather than establishing separate fiscal exposure. These include: television series relocation incentives providing up to 4.5 percent additional credits; promotional and investment credits providing up to 4.5 percent or 9.0 percent additional credits depending on criteria met; and enhanced economic development credits providing up to 4.5 percent additional credits for hiring residents of economically disadvantaged areas.
The 10-year program extension through fiscal year 2050 maintains long-term fiscal exposure at current maximum levels rather than allowing the program to expire in fiscal year 2040.
The OLS notes that actual annual fiscal impact will vary significantly based on application volume, project eligibility determinations, and the Economic Development Authority’s discretion in awarding credits.
The OLS notes that while the bill may result in State revenue reductions through tax credit awards, the program can stimulate economic activity and job creation within New Jersey’s film and digital media industries, which could generate offsetting State revenue through increased business activity, employment, and related tax collections. The net fiscal impact remains indeterminate due to the difficulty in quantifying the economic effects of the incentivized production activities.
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Section: |
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Analyst: |
Associate Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).