N.J. Admin. Code § 19:31T-1.2
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:
"Applicant" means:
"Approved applicant" means an applicant for a tax credit for qualified film production expenses or qualified digital media content production expenses that has received initial approval from the Authority.
"Authority" means the New Jersey Economic Development Authority.
"Business assistance or incentive" means "business assistance or incentive" as that term is defined pursuant to N.J.S.A. 54:50-39.d.
"Commission" means the New Jersey Motion Picture and Television Commission.
"Commitment period" means, for studio partners, the period beginning with the commencement of the eligibility period and expiring 10 years following:
"Deferred compensation" means additional payments made to highly compensated individuals, such as writers, directors, producers, and performers, other than background actors with no scripted lines, that increase the total remuneration received for services performed on a production. Deferred compensation payments may include, but are not limited to, payments and advance payments for profit participations, residuals, launch bonuses, buy-out fees, or any other compensation due a highly compensated individual as a result of their services performed on, or the financial exploitation of a film or commercial audiovisual product.
"Digital media content" means any data or information that is produced in digital form, including data or information created in analog form, but reformatted in digital form, text, graphics, photographs, animation, sound, and video content. "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.A. 2C:34-2 and 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 approved applicant for distribution or incorporation into the approved applicant's digital media content.
"Director" means the Director of the New Jersey Division of Taxation.
"Eligibility period" means, with respect to studio partners, the period in which a studio partner may claim a tax credit for qualified film production expenses, including expenses that would not constitute qualified film production expenses but for the applicant's designation as a studio partner, beginning the earlier of:
"Film" or "film project" means a feature film, a television series, or a television show of 22 minutes or more in length, intended for a national audience, or a television series or a television show of 22 minutes or more in length intended for a national or regional audience, including, but not limited to:
"Film" shall not include a production featuring news, current events, weather, and market reports or public programming, or sports event s, a production that solicits funds, a production containing obscene material as defined at N.J.S.A. 2C:34-2 and 2C:34-3, or a production primarily for private, industrial, corporate, or institutional purposes, or a reality show, except for applicants applying for a tax credit against the tax imposed pursuant to section 5 at P.L. 1945, c. 165, if the production company of the reality show owns, leases, or otherwise occupies a production facility for a minimum term of 24 months, and makes a capital investment, after July 1, 2018, of no less than $ 3,000,000 in such a facility within a designated enterprise zone established pursuant to the New Jersey Urban Enterprise Zones Act, N.J.S.A. 52:27H-60 et seq., or a UEZ-impacted business district established pursuant to N.J.S.A. 52:27H-66.2. The capital investment of the production company may include the capital investment of its landlord after July 1, 2018. To determine the capital investment of the landlord, the Authority shall multiply the owner's total capital investment in the building by the fraction, the numerator of which is the leased net leasable area and the denominator of which is the total net leasable area. "Film" shall not include an award show or other gala event that is not filmed and produced at a nonprofit arts and cultural venue receiving State funding.
"Film production use" means a film studio, professional stage, sound stage, television studio, recording studio, screening room, or other production support space or infrastructure used for producing films or other commercial audiovisual products, including, but not limited to, production offices, mill space, or backlots, provided that the predominant use shall not be administrative or backoffice use and that backlots shall not exceed 20 percent of the required minimum size of the production facility.
"Fiscal year" means the State's fiscal year, which begins July 1 and ends June 30.
"Full-time or full-time equivalent employee" means an individual employed by the approved applicant for consideration for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as fulltime or full-time equivalent employment, whose wages are subject to withholding as provided in the New Jersey Gross Income Tax Act, N.J.S.A. 54A:1-1 et seq., regardless of whether the individual is a resident or nonresident gross income taxpayer, or who is a partner of an approved applicant, 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.A. 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 consulting basis for the approved applicant.
"Highly compensated individual" means an individual who directly or indirectly receives compensation in excess of $ 500,000 for the performance of services used directly in a production. An individual receives compensation indirectly when the approved applicant pays a loan out company that, in turn, pays the individual for the performance of services.
"Homeowner" means an individual who owns and occupies a personal residence, whether as their primary residence or otherwise.
"Incurred in New Jersey" means, for any application submitted after July 3, 2018, the effective date of P.L. 2018, c. 56, pursuant to which a tax credit has not been allowed prior to July 2, 2021, the effective date of P.L. 2021, c. 160, service performed in New Jersey and tangible personal property used or consumed 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 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, at the Authority's discretion, the film production company provides to the Authority the vendor's information in a form and manner prescribed by the Authority. Purchased tangible property is not used and consumed in New Jersey unless it is purchased from a vendor authorized to do business in New Jersey and is delivered to or acquired in New Jersey; provided, however, that if a production is also located in another jurisdiction, the purchased tangible property is used and consumed in New Jersey if the acquisition and delivery of purchased tangible property is located in either New Jersey or another jurisdiction where the production takes place. Payment made to a homeowner for the use of a personal residence located in the State for filming shall be deemed an expense incurred in New Jersey, notwithstanding the fact that such homeowner is not a vendor authorized to do business in New Jersey, provided that the approved applicant has made the withholding required by N.J.S.A. 54:10A-5.39b.g and 54A:4-12b.h and N.J.A.C. 19:31-21.3(c).
"Independent contractor" means 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" means 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.
"New Jersey film-lease partner facility" or "film-lease partner facility" means one of the following for which the owner, developer, or tenant has made the commitment to build, lease, or operate for a period of at least five successive years beginning with the later of the date of Authority approval or the issuance of the temporary certificate(s) of occupancy:
"New Jersey film-lease production company" or "film-lease production company" means an applicant, including any applicant that is a member of a combined group pursuant to N.J.S.A. 54:10A-4.11 or any other entity in which the film-lease production company has a material ownership interest of at least 30 percent and material operational role in the production, including, but not limited to, as a producer, that otherwise complies with the eligibility requirements of the program and has made a commitment to lease or otherwise occupy production space in a film-lease partner facility and who will shoot at least 50 percent of the total principal photography shoot days of the film project within New Jersey at the film-lease partner facility. A "New Jersey film-lease production company" may include an unrelated entity principally engaged in the production of a film or other commercial audiovisual product with whom a designated film-lease production company contracts to perform film production services on its behalf, such that the designated film-lease production company controls such film or product during preproduction, production, and postproduction, and all results and proceeds of such services constitute, from the moment of creation, "works made for hire" for the film-lease production company pursuant to the provisions of the Federal Copyright Act of 1976, 17 U.S.C. §§ 101 et seq.
"New Jersey studio partner" or "studio partner" means a film production company that has made a commitment to produce films or commercial audiovisual products in New Jersey and has developed, purchased, or executed a 10-year contract to lease a production facility, or has executed a purchase contract with a governmental authority for the purpose of developing a production facility, which purchase contract must be executed within 48 months from the date of designation as a New Jersey studio partner; provided, however, the Authority Board, in its discretion, may extend the time to execute a purchase contract for an additional 12 months. A "studio partner" shall also include a film production company that executes at least a 10-year lease for a production facility that is a portion of a film-lease partner facility. A "New Jersey studio partner" may include any other member of an applicant's combined group, pursuant to N.J.S.A. 54:10A-4.11. For the purpose of applying for film tax credits pursuant to N.J.A.C. 19:31-21.3, a "New Jersey studio partner" shall also mean an unrelated entity principally engaged in the production of a film or other commercial audiovisual product with whom a designated studio partner contracts to perform film production services on its behalf, such that the designated studio partner controls such film or product during pre-production, production, and post-production, and all results and proceeds of such services constitute, from the moment of creation, "works made for hire" for the studio partner pursuant to the provisions of the Federal Copyright Act of 1976, 17 U.S.C. §§ 101 et seq.
"Partnership" means an entity classified as a partnership for Federal income tax purposes.
"Personal residence" means a residential unit, the land on which the residential unit is located, and any other structures on such land. A personal residence includes, but is not limited to, a condominium, a unit in a horizontal property regime, or a unit in a cooperative or mutual housing corporation of a residential shareholder. A personal residence excludes a multi-family residential structure of more than four units and a residential unit that another person occupies as that person's primary residence.
"Post-production costs" means the costs of the phase of production of a film that follows principal photography, in which raw footage is cut and assembled into a finished film with sound synchronization and visual effects. There shall be no distinguishing between the production and post-production phases for animated films due to the intertwined relationship between those two phases in animation.
"Primary place of business" means, for purposes of determining the amount of tax credit pursuant to N.J.A.C. 19:31- 21.6(a) and (b), the headquarters or commercial facility of a vendor at which the qualified expense transaction occurs.
"Principal photography" means the filming of major and significant portions of a qualified film that involves the director of the film on set. For animated films, "principal photography" means the point at which the models created during the pre-production phase are complete and the staff begins to choreograph, animate, and render the animations.
"Privilege period" means the calendar or fiscal accounting period for which a tax is payable under the Corporation Business Tax Act, N.J.S.A. 54:10A-5.
"Production facility" means a building or buildings in New Jersey used for film production uses of no less than 20,000 square feet for a production company of a reality show and no less than 250,000 square feet for a film-lease partner facility or a studio partner.
"Program" means the Garden State Film and Digital Media Jobs Program.
"Qualified digital media content production expenses" means expenses incurred in New Jersey after July 1, 2018, for the production of digital media content. "Qualified digital media content production expenses" shall include, but not be limited to, 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.A. 54A:1-1 et seq., has been paid or is due; and, the costs of computer software and hardware, data processing, visualization technologies, sound synchronization, editing, and the rental of facilities and equipment. Payments made to a loan out company or to an independent contractor shall not be deemed "qualified digital media content production expenses" unless the payments are made in connection with a trade, profession, or occupation carried out in this State or for the rendition of personal services performed in the State and the approved applicant has made the withholding required pursuant to N.J.A.C. 19:31-21.3(c). "Qualified digital media content production expenses" shall not include expenses incurred in marketing, promotion, or advertising digital media 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 approved applicant for distribution or incorporation into the approved applicant's digital media content, or other costs for intangible personal expenses, shall not be deemed "qualified digital media content production expenses."
"Qualified film production expenses" means an expense incurred in New Jersey after July 1, 2018, for the production of a film, including pre-production costs, and post-production costs incurred in New Jersey. "Qualified film production expenses" shall include, but not be limited to: wages and salaries of individuals employed in the production of a film on which the tax imposed pursuant to N.J.S.A. 54A:1-1 et seq., has been paid or is due; and, the costs for tangible personal property used and services performed, directly and exclusively in the production of a film, such as expenditures for film production facilities, props, makeup, wardrobe, film processing, camera, sound recording, set construction, lighting, shooting, editing, and meals. Payments made to a loan out company or to an independent contractor shall not be deemed a "qualified film production expense" unless the payments are made in connection with a trade, profession, or occupation performed in this State or for the rendition of personal services performed in this State and the approved applicant has made the withholding required pursuant to N.J.A.C. 19:31-21.3(c). As of July 6, 2023, the effective date of P.L. 2023, c. 97, payment made to a homeowner, who is otherwise not a vendor authorized to do business in New Jersey, for the use of a personal residence for filming shall not be deemed a "qualified film production expense" unless the approved applicant has made the withholding required pursuant to N.J.S.A. 54:10A-5.39b.g and 54A:4-12b.h and N.J.A.C. 19:31-21.3(c). For the purposes of this definition, wages and salaries of individuals employed in the production of a film shall include deferred compensation, including advances on deferred compensation, incurred by studio partners, provided the studio partner files a supplemental report as set forth at N.J.A.C. 19:31-21.7(f). "Qualified film production expenses" shall not include: costs for intangible personal expenses incurred after February 26, 2024; expenses incurred in marketing or advertising a film; and payment in excess of $ 500,000 to a highly compensated individual for costs for a story, script, or scenario used in the production of a film and for wages or salaries or other compensation for writers, directors, including music directors, producers, and performers, other than background actors with no scripted lines, except as follows, based on the qualified film production expenses in the State without including the excess amounts paid to highly compensated individuals:
"Reality show" means content that is centered around the filming of people in real-life, predominantly unscripted or soft-scripted, situations.
"Selling business" means an approved applicant that has unused tax credits, which it wishes to sell.
"Shoot day" means a minimum of eight hours from first unit crew call to wrap.
"Square feet" means the sum of all areas on all floors of a building included within the outside faces of its exterior walls, including all vertical penetration areas for circulation and shaft areas that connect one floor to another, but disregarding cornices, pilasters, buttresses, and similar structures that extend beyond the wall faces. For backlot, "square feet" means the area dedicated by the applicant for backlot use as evidenced on a site plan.
"Taxable year" means the calendar or fiscal accounting period for which a tax is payable pursuant to N.J.S.A. 54A:1-1 et seq., and commencing on or after July 1, 2018, but before July 1, 2039.
"Taxation" means the New Jersey Division of Taxation.
"Tax credit transfer certificate" means the certificate issued by Taxation certifying to the selling business the amounts of film tax credit being sold. The certificate shall state that the transferor waives its right to claim the credit shown on the certificate. The certificate shall have the same tax credit vintage year as the original tax credit certificate.
"Tax credit vintage year" means 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.
"Taxpayer" means an applicant, a designated studio partner, a designated film-lease partner facility, or an approved applicant.
"Total digital media content production expenses" means costs for services performed and property used or consumed in the production of digital media content including, but not limited to, wages and salaries. "Total digital media content production expenses" shall not include costs for intangible personal expenses incurred after February 26, 2024.
"Total film production expenses" means costs for services performed and tangible personal property used or consumed in the production of a film including, but not limited to, wages and salaries. "Total film production expenses" shall not include costs for intangible personal expenses incurred after February 26, 2024.
"Vendor authorized to do business in New Jersey" means 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.
N.J. Admin. Code § 19:31T-1.2
See: 51 N.J.R. 1256(a), 52 N.J.R. 58(b).
In definition "Tax credit vintage year", substituted "issued the initial approval of" for "approved".
Special amendment, R.2024 d.022, effective 2/26/2024 (to expire 2/22/2025).
See: 56 N.J.R. 491(a),.
Rewrote the section.