New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31T - GARDEN STATE FILM AND DIGITAL MEDIA JOBS PROGRAM › Subchapter 1 - GARDEN STATE FILM AND DIGITAL MEDIA JOBS PROGRAM › Section 19:31T-1.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, as used in this subchapter,
					 shall have the following meanings, unless the context clearly indicates
					 otherwise:
"Applicant" means:
1. A film production company applying for
				  designation as a studio partner;
2.
				  An entity applying for designation as a film-lease partner facility;
3. A person or entity applying for a tax
				  credit for qualified film production expenses. Such an entity includes, but is
				  not limited to, a designated studio partner or an entity applying for a tax
				  credit as a film-lease production company; or
4. A person or entity applying for a tax
				  credit for qualified digital media content production expenses.
"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:
1. In the case of studio
				  partner developing or purchasing a production facility, the issuance of a
				  temporary certificate(s) of occupancy for the production facility developed or
				  purchased as a condition of designation as a studio partner; or
2. In the case of studio partner leasing a
				  production facility, commencement of the lease term for the production facility
				  leased as a condition of designation as a studio partner.
"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:
1. The commencement of the principal
				  photography for the studio partner's initial film in New Jersey; or
2. In the case of a studio partner developing
				  or purchasing a production facility, at the issuance of a temporary
				  certificate(s) of occupancy for the production facility developed or purchased
				  as a condition of designation as a studio partner, and in the case of a studio
				  partner leasing a production facility, at the commencement of the lease term
				  for the production facility leased as a condition of designation as a studio
				  partner, and extending thereafter for a term of not more than 10 years.
"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:
1. A documentary
				  feature film, documentary television series, or documentary television
				  shows;
2. A game show;
3. A talk show;
4. A competition or variety show filmed
				  before a live audience; or
5. An
				  award show or other gala event filmed and produced at a nonprofit arts and
				  cultural venue receiving State funding.
"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:
1. A production facility;
2. A production facility built, leased, or
				  operated by a production company designated as a studio partner, which the
				  studio partner no longer occupies; or
3. A portion of a production facility owned
				  by a studio partner that is in excess of the space being utilized by the studio
				  partner; provided that the space utilized by the studio partner both exceeds
				  the minimum size for a studio partner and film-lease partner facility,
				  respectively.
"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:
1. For
				  a studio partner that incurs less than $ 50,000,000 in qualified film
				  production expenses in the State, in excess of amounts paid to highly
				  compensated individuals, an additional amount, not to exceed $ 18,000,000, of
				  the wages or salaries or other compensation for writers, directors, including
				  music directors, producers, and performers, other than background actors with
				  no scripted lines, shall constitute qualified film production
				  expenses;
2. For a studio partner
				  that incurs $ 50,000,000 or more in qualified film production expenses in the
				  State, in excess of amounts paid to highly compensated individuals, an
				  additional amount, not to exceed $ 72,000,000, of the wages or salaries or
				  other compensation for writers, directors, including music directors,
				  producers, and performers, other than background actors with no scripted lines,
				  shall constitute qualified film production expenses;
3. For a film-lease production company that
				  incurs less than $ 50,000,000 in qualified film production expenses in the
				  State, in excess of amounts paid to highly compensated individuals, an
				  additional amount, not to exceed $ 15,000,000, of the wages or salaries or
				  other compensation for writers, directors, including music directors,
				  producers, and performers, other than background actors with no scripted lines,
				  shall constitute qualified film production expenses; and
4. For a film-lease production company that
				  incurs $ 50,000,000 or more in qualified film production expenses in the State,
				  in excess of amounts paid to highly compensated individuals, an additional
				  amount, not to exceed $ 60,000,000, of the wages or salaries or other
				  compensation for writers, directors, including music directors, producers, and
				  performers, other than background actors with no scripted lines, shall
				  constitute qualified film production expenses.
"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.