NJ approves film tax breaks for 3 producers who filmed during COVID

The New Jersey Economic Development Authority on March 10 approved some of the few awards for media productions during the pandemic under a lucrative and popular tax break program meant to lure the film and television industry.

All three awards combined totaled $1.32 million, according to the Wednesday board agenda.

Known formally as the NJ Film and Digital Media Tax Credit Program, the state has leveraged the incentive program to attract renowned productions such as West Side Story, A Plot Against America, The Enemy Within. Army of the Dead, Joker and The Trial of the Chicago 7.

But the COVID-19 pandemic and the high risk of transmission, combined with a litany of mitigation protocols in effect under the Murphy administration and by the film production unions, has ground most production to a halt in 2020.

“2020 was going to exceed that,” Steven Gorelick, executive director of the New Jersey Motion Picture and Television Commission, said in an October interview. “Going into March, we had three network series already about to film, and then the pandemic hit and all production stopped. Everywhere. Across the globe.”

As of Feb. 23, the NJEDA awarded nearly $104 million in tax breaks to 30 projects ever since the formal launch of the program, known as the NJ Film and Digital Media Tax Credit Program.

Just a slither of that was after March 2020, when the first case of COVID-19 in the state was detected and Gov. Phil Murphy ordered a slew of lockdown measures in a bid to halt the spread of the virus.

Fourteen of those 30 projects were approved after March 2020, most of them for production finished prior to the pandemic.

In 2019, the program saw demand outstrip available funding. Under the program, film projects can be awarded a tax break equaling 30% of their production costs, or 35% for filming in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem counties. In January, Murphy approved an expansion of the program from $75 million to $100 million a year for film and TV, though digital media projects are still capped at $10 million.

But usage of the tax credits plummeted in 2020. The NJEDA, which awards the breaks and monitors compliance, had $150 million of tax breaks it could award over the program during the 2020 fiscal year, $50 million of which carried over from the previous year.

Just over half of the available credits – $64.3 million – were never awarded, and state law allows up to $50 million to be rolled over into the following year.

“Because many film productions were delayed or cancelled due to the COVID-19 pandemic, the NJEDA board approved less credits than it might have otherwise,” Jake McNichol, a spokesperson for the NJEDA, said in an October statement.

Many film producers NJBIZ interviewed outlined a slew of mitigation efforts to keep the production going while protecting their dozens or hundreds of crew members against the pandemic.

Nonetheless, the $14.5 billion incentive package Murphy approved in January includes $2.5 billion toward an expanded form of the tax credit program over a 13-year period.

What was approved

The first award was totaled $922,633.90 To Black Friday the Film’s production of the action thriller “Red 48.” Shooting began over the summer in August in Parsippany, and runs through March 1, according to the board agenda.

A second award was for $102,921.60 to Shackled Film for its production of the science-fiction crime thriller “Shackled.” Filming officially began in February 2020 in Paterson and is set to finish in August.

The third award was for $297,048.60 to Whoiskurt for its production of “Kurt,” which follows a “power-hungry yet true artistic photographer on his way out of the industry due to his failure to adapt with modern practices,” according to the NJEDA board agenda. Filming of that began last May in Paterson and finished on Nov. 30.

Meanwhile, a new film studio formally opened at the sprawling Kearny Point office complex in Hudson County.

Known as the Palisades Stage, the facility includes 23,000 square feet of office space, 27 feet high with a standard lighting grid, green rooms and loading bays.

Read the full article here.

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