TRENTON – Despite all the hoopla about a film tax credit given to the much-maligned but popular MTV hit show, “Jersey Shore,” a Democratic senator has introduced a bill that would actually increase the scope of the film tax credits.
The bill, S3056, calls for the following two major changes in the “Garden State Film and Digital Media Jobs Act”:
*Increasing the annual program cap for the film production tax credit from $10 million to $50 million and from $5 million to $10 million for digital media productions; and
* Providing a tax credit equal to 22 percent, instead of the current 20 percent, of eligible production expenses if the expenses represent purchases of goods from businesses located in Urban Enterprise Zones (UEZ) or purchases of services performed by residents of a UEZ.
The bill, introduced by Democratic Sen. Paul Sarlo, would also extend the digital media tax credit to salaries and wages paid to full-time employees who are not new employees and it would eliminate the recapture of tax credit amounts if new full-time positions are not maintained.
This bill, on the agenda Thursday for the Senate Budget and Appropriations Committee, states the film production tax credit is an important economic development tool.
Film Tax or Digital Media Tax Credit Certificates, whether held by the original applicant or purchased by a third party, could not be used to reduce a tax liability on any tax return with an original due date which fell after June 30, 2010 and before July 1, 2011, according to the bill.
The 2010 law did not prevent the New Jersey Economic Development Agency or the Division of Taxation from processing or approving applications for tax credits or applications to sell or transfer credits. Under this bill those tax credits and prospectively approved credits and transfer credits could be used under the expanded program to offset tax liability on any tax return with an original due date which falls after July 1, 2011.
Sarlo could not be reached for comment this afternoon.