Division of TaxationAmendments to the Garden State Film and Digital Media Jobs Act
This law amends the Garden State Film and Digital Media Jobs Act under the jurisdiction of the New Jersey Economic Development Authority (NJEDA), as well as portions of the New Jersey Economic Recovery Act of 2020.
It extends the eligibility period of the program by ten years (from on or before July 1, 2039 to on or before July 1, 2049) and extends the timeframe for awarding credits (from prior to Fiscal year 2040 to prior to Fiscal Year 2050). It amends various definitions and eligibility requirements the NJEDA uses to award Garden State Film and Digital Media tax credits, and also changes how the tax certificate (or credit transfer certificate) holder may use the credit.
The law modifies the tax credit recapture provisions stipulating that tax credits can only be recaptured from the initial recipient of the credits, not the purchaser or assignee of the tax credit transfer certificate.
It expands on the definition of “qualified production expenses” to include deferred compensation payments (which individual Income Tax is not withheld), made directly to a labor union on behalf of an individual who performed services on a production.
The law requires the Division to purchase unused tax credits awarded pursuant to the New Jersey Aspire Program Act, the Cultural Arts Incentives Program Act, and the Garden State Film and Digital Media Jobs Act. The Director must purchase credits awarded for 95% of the credit amount for any original application approved by the NJEDA by January 1, 2026 provided that:
It also allows a New Jersey studio partner or New Jersey film-lease production company an additional tax credit of 4% of the qualified film production or digital media expenses incurred during a tax period on or after July 1, 2025, but before July 1, 2049.
Additionally, tax credits allowed in the law shall not exceed an additional amount totaling 5% of the qualified expenses during the tax period mentioned above. The total amount of tax credits allowed pursuant to the Garden State Film and Digital Media Jobs Act shall not exceed an aggregate additional amount totaling 45% of the qualified expenses incurred during a tax year.
Appropriates State and Federal Funds For Fiscal Year 2026 State Budget
This law provides State government budgetary appropriations for Fiscal Year 2026, specifically $2,431,572,000 the ANCHOR Property Tax Relief Program, $239,300,000 for the Property Tax Reimbursement Program, and $280,000,000 for the Stay NJ Property Tax Credit Program. It also specifies for payments are appropriated.
Modifies Tax Rate on Certain Nicotine Products
This law increases the tax on cigarettes from $2.70 per pack of 20 cigarettes to $3.00 per pack, liquid nicotine from $0.10 per fluid milliliter to $0.30 per fluid milliliter; and container e-liquid from 10% to 30% of the listed retail sale price.
Modifies Tax on Certain Forms of Online Gaming and Wagering
This law increases the Internet casino gaming tax, the Internet sports wagering tax, and the daily fantasy sports operating fee to 19.75%.
Amends both the New Jersey Angel Investor Credit Act and the Technology Business Tax Certificate Transfer Program
This law amends both the New Jersey Angel Investor Credit Act and the Technology Business Tax Certificate Transfer Program.
It increases the Angel Investor Tax Credit from 20% of the qualified investment made by the taxpayer to 35%. The higher credit amount of 25% of the qualified investment allowed to the taxpayer (meeting certain requirements) is increased to 40%. The law also decreases the amount of employees the company has from fewer than 225 to fewer than 150.
The credit can be applied against a taxpayer’s Corporation Business Tax liability or Gross Income Tax liability during the privilege period in which it was applied for. The value of credits cannot exceed $500,000 for each qualified investment made.
If the value of transferable tax credits transferred is less than $75,000,000, the New Jersey Economic Development Authority along with the Division, must certify the excess value of transferable tax benefits.
The law also reduces the cumulative total Angel Investor Tax Credits from $35,000,000 to $25,000,000.
Exempts Qualified Capital Gains from Sale or Exchange of Small Business Stock from New Jersey Gross Income
The law states that gross income does not include net gains or income derived from the sale, exchange, or other disposition of qualified small business stock that are also exempt from federal taxation.
Modifies Payer of Fees and Taxes on Certain Real Property Transfers
This law amends the additional fee on certain transfers of real property and imposes the fee on the grantor, where previously it was imposed on the grantee. The law also amends the Controlling Interest Transfer Tax to impose the fee on the seller, where previously it was imposed on the purchaser. A new fee structure has been created for both scenarios.
Expands Property Tax Reimbursement Eligibility
The law allows disabled individuals under age 65 who receive federal Railroad Retirement Disability payments and meet all of the other eligibility requirements to apply for the Property Tax Reimbursement (PTR) program.
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