Digital Media Tax Credit Program

New Jersey Economic Development Authority:
Your Resource for Economic Opportunity

Welcome to EDA’s online application for financial assistance. We look forward to helping you as you grow your business in New Jersey!

GENERAL APPLICATION INFORMATION
Before you get started, there are a few things you should be aware of to make the application process as simple as possible.

• In order to fully complete the online application, you must have consulted with an EDA Program Analyst or Officer. Your Officer can guide you through the application process and can answer any questions you may have.
• If you have not consulted with a Business Development Officer, please call EDA Customer Care at (844) 965-1125 or email  CustomerCare@njeda.gov .
• The estimated time required to complete this application is about 40 minutes.
• Applications will lock once submitted through the portal and they cannot be updated. Please check with your Officer to make sure all information is correct befo re submitting.
• Questions are tailored to your project/business.  This allows us to ask relevant questions about your project/business.  Please have as much information as possible with you as you complete the application, including:
  • For Privately Held Corporations:  Name, address, social security number, date of birth, position, citizenship information and percent ownership for all officers and directors. 
  • For Nonprofit Organizations:  Name, address, social security number, date of birth, position and citizenship information for all officers and trustees.  You will also need to provide a copy of your 501(c) (3) determination letter
  • Your organization’s Federal Employers Identification Number (FEIN) and NAICS code.
  • Specific project information including, budget, schedule, locations, cast & crew, synopsis, etc. See the documentation checklist for a complete list.
  • Your Business Development Officer will be able to provide you with more specific details on the information required for you to complete the application.

APPLICATIONS ARE NOT CONSIDERED TO BE COMPLETELY SUBMITTED UNTIL THE AUTHORITY DETERMINES THAT ALL REQUIRED INFORMATION AND DOCUMENTATION HAS BEEN RECIEVED. ONCE AN APPLICATION HAS BEEN SUMBITED THE PRODUCTION HAS 180 DAYS TO BEGIN PRINCIPAL PHOTOGRAPHY.
DIGITAL MEDIA TAX CREDIT APPLICATION INFORMATION
This is an application for a transferable tax credit against the corporation business tax and the gross income tax for qualified expenses incurred for the production of certain film and digital media content in New Jersey. The goal of the program is to incentivize production companies to film and create digital media content in New Jersey.
For information specific to the Digital Media Tax Credit program, please visit our website at www.njeda.gov/film and click “Film and Digital Media Tax Credit Program” on the list of the NJEDA’s Financing and Incentive programs. On the right side of our webpage, you can find a link to the Current Program Rules, Statute, and Frequently Asked Questions about our program. Under the general dropdown for the Film Tax Credit program, you can find information about the application process and required documentation, eligibility requirements, fees related to the program, diversity tax credit, and more. There is a separate FAQ for taxation as well.
Required documentation includes : an application fee, a tax clearance certificate, a detailed budget, a detailed project description of the digital media content produced, Form NJ-WR30 for each quarter of the fiscal year the application is for, and employee information worksheet, an affirmative action/prevailing wage form, a diversity plan, an operating agreement / bylaw form, and a legal certification.
Please review the application checklist available on the film page ( www.njeda.gov/film)
For the full New Jersey Motion Picture and Film Commission website, please visit NJ Motion Picture & Television Commission .
Eligibility Requirements :
In order for a project to be eligible for tax credits under the NJ Digital Media Tax Credit Program, the film project must:

• • Meet one of the following expense eligibility thresholds:
    • At least $2,000,000 of the total digital media content production expenses of the taxpayer are incurred for services performed, and goods purchased through vendors authorized to do business, in New Jersey. Wages and salaries payments cannot count as wages paid to NJ vendors.
    • At least 50 percent of the qualified digital media content production expenses of the taxpayer are for wages and salaries paid to full-time or full-time equivalent employees in New Jersey.
  • "Digital media content" means the following: digitally formatted and distributed content, which content includes data or information created in analog form but  reformatted in digital form: animation; video games; visual effects; interactive media, including virtual, augmented, or mixed reality; content containing text, graphics, or photographs; sound; and video. "Digital media content" shall not mean content offerings generated by the end user (including postings on electronic bulletin boards and chat rooms); content offerings comprised primarily of local news, events, weather, or local market reports; public service content; electronic commerce platforms (such as retail and wholesale websites); websites or content offerings that contain obscene material as defined pursuant to N.J.S.2C:34-2 and 31 N.J.S.2C:34-3; websites or content that are produced or maintained primarily for private, industrial, corporate, or institutional purposes; or digital media content acquired or licensed by the taxpayer for distribution or incorporation into the taxpayer's digital media content.

A payment made to a loan out company or to an independent contractor shall not be deemed a "qualified digital media content production expense" unless the payment is made in connection with a trade, profession, or occupation carried on in this State or for the rendition of personal services performed in this State and the taxpayer has made the withholding required. The applicant must withhold 6.37% from all payments made to independent contractors and loan out companies. All loan out companies must be fully authorized to do business in NJ.
The following tables show the application fees for each project:
 

Tier of Project	Qualified Spend
Micro / Indie	$0 - $999,999
Small	$1M - $5,999,999
Medium	$6M - $14,999,999
Large	$15M - $29,999,999
Mega	$30M +

 

Tier	Application Fee	Approval Fee	Issuance Fee	Credit Transfer Fee (per transfer)
Micro / Indie	$100	$100	$100	$1,000
Small	$250	$500	$500	$5,000
Medium	$2,000	$5,000	$5,000	$5,000
Large	$5,000	$12,000	$12,000	$5,000
Mega	$10,000	$25,000	$25,000	$5,000

Application Fees are non-refundable and due at application submission.

Approval Fees are non-refundable (unless the project is declined) and due prior to project approval.

Issuance Fees are non-refundable and due prior to tax credit issuance.

Credit Transfer Fees are non-refundable and due at tax credit transfer application submission and are per transfer.

*Each project is also subject to a non-refundable third-party budget review fee due prior to project approval.

*Application fees are subject to change if submitted budget amounts change prior to approval

KEY TERMS AND DEFINITIONS:
Digital Media: "Digital media content" means the following: digitally formatted and distributed content, which content includes data or information created in analog form but  reformatted in digital form: animation; video games; visual effects; interactive media, including virtual, augmented, or mixed reality; content containing text, graphics, or photographs; sound; and video. "Digital media content" shall not mean content offerings generated by the end user (including postings on electronic bulletin boards and chat rooms); content offerings comprised primarily of local news, events, weather, or local market reports; public service content; electronic commerce platforms (such as retail and wholesale websites); websites or content offerings that contain obscene material as defined pursuant to N.J.S.2C:34-2 and 31 N.J.S.2C:34-3; websites or content that are produced or maintained primarily for private, industrial, corporate, or institutional purposes; or digital media content acquired or licensed by the taxpayer for distribution or incorporation into the taxpayer's digital media content.
“Full Time or Full Time Equivalent”: "Full-time or full-time equivalent employee" means an individual employed by the taxpayer for consideration for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time or full-time equivalent employment, whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or whose wages are not subject to tax under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., due to the provisions of a reciprocity agreement with another state, regardless of whether the individual is a resident or nonresident taxpayer, or who is a partner of a taxpayer, who works for the partnership for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time or full-time equivalent employment, and whose distributive share of income, gain, loss, or deduction, or whose guaranteed payments, or any combination thereof, is subject to the payment of estimated taxes, as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. "Full-time or full-time equivalent employee" shall not include an individual who works as an independent contractor or on a 1 consulting basis for the taxpayer.
“Incurred in New Jersey” : A service is performed in New Jersey to the extent that the individual performing the service is physically located in New Jersey while performing the service. Notwithstanding where the property is delivered or acquired, rented tangible property is used or consumed in New Jersey to the extent that the property is located in New Jersey during its use or consumption and is rented from a vendor authorized to do business in New Jersey or the film production company provides to the authority the vendor's information in a form and manner prescribed by the authority.
“Independent Contractor” : An individual treated as an independent contractor for Federal and State tax purposes who is contracted with by the approved applicant for the performance of services used directly in a production.
“Loan Out Company” : A personal service corporation or other entity that is contracted with by the approved applicant to provide specified individual personnel, such as artists, crew, actors, producers, or directors for the performance of services used directly in a production. "Loan out company" shall not include entities contracted with by the approved applicant to provide goods or ancillary contractor services, such as catering, construction, trailers, equipment, or transportation. The applicant must withhold 6.37% from All payments made to independent contractors and loan out companies. All loan out companies must be fully authorized to do business in NJ.
“Qualified Film Production Expenses” : "Qualified digital media content production expenses" means an expense incurred in New Jersey for the production of digital media content. "Qualified digital media content production expenses" shall include but not be limited to: the wages and salaries of individuals employed in the production of digital media content on which the tax imposed by the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. has been paid or is due, and any wages and salaries of individuals employed in the production of digital media content that are not subject to tax under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., due to the provisions of a reciprocity agreement with another state; the costs of computer software and hardware, data processing, visualization technologies, sound synchronization, editing, and the rental of facilities and equipment; and the costs for post-production, including, but not limited to: editing, sound design, visual effects, animation, music composition, color grading, and mastering. Payment made to a loan out company or to an independent contractor shall not be deemed a "qualified digital media content production expense" unless the payment is made in connection with a trade, profession, or occupation carried on in this State or for the rendition of personal services performed in this State and the taxpayer has made the withholding required pursuant to subsection 5 g. of this section. For applications submitted prior to the effective date of P.L. , c. (pending before the Legislature as this bill), "qualified digital media content production expenses" shall not include expenses incurred in marketing, promotion, or advertising digital media [; costs incurred for the design, maintenance, and hosting of websites; costs incurred in digital search engine optimization or pay-per-click campaigns;] or other costs not directly related to the production of digital media content. For applications submitted after the effective date of P.L., c. (pending before the Legislature as this bill), “qualified digital media content production expenses" shall not include expenses incurred in marketing, promotion, or advertising digital media; costs incurred for the design, maintenance, and hosting of websites; or other costs not directly related to the production of digital media content. Costs related to the acquisition or licensing of digital media content by the taxpayer for distribution or incorporation into the taxpayer's digital media content, or any costs included in an application submitted to the authority, shall not be deemed "qualified digital media content production expenses." All qualified expenses need to be incurred through a vendor authorized to do business in NJ.
Tax Credit Vintage Year : The applicant's privilege period or taxable year in which the Authority issued the initial approval of the application, until the cumulative total amount of tax credits, and tax credit transfer certificates, allowed to applicants exceeds the amounts of tax credits available in a fiscal year, after which "tax credit vintage year" shall mean the next subsequent privilege period or taxable year of the applicant in which tax credits are available.
Vendor Authorized to do Business in NJ : A vendor that, at the time the expense was incurred in New Jersey, has obtained authorization to conduct business in this State by filing the appropriate documents with the State of New Jersey Department of the Treasury, Division of Revenue and Enterprise Services.