Why Production Powerhouses Are Flocking to New Jersey: The 40% Film Tax Credit Built on Local Content

From indie auteurs to streaming giants, more producers are turning their cameras toward New Jersey—not just for its cinematic backdrops, but for its bottom-line brilliance.

At the heart of this industry shift is the New Jersey Film and Digital Media Tax Credit Program, which offers up to 40% in transferable tax credits for qualifying productions. But unlike traditional tax incentives, this one comes with a bold, accountable twist: you only get the credit if you invest in New Jersey’s economy.

What Is the New Jersey Film and Digital Media Tax Credit?

The New Jersey Film and Digital Media Tax Credit Program is a transferable tax credit against the state’s Corporate Business Tax (CBT) and Gross Income Tax (GIT), designed to attract film, television, and digital media projects to the Garden State.

Eligible productions can earn:

• 30–35% base tax credits on qualified in-state production expenses
• Up to 5% geographic bonus for filming in South Jersey
• 2% diversity bonus for hiring women and minorities in key creative positions

But the incentives are tied directly to local content compliance—a policy framework that ensures productions hire local talent, use NJ-based vendors, and spend money within the state.

Local Content Requirements: What You Need to Qualify

To be eligible for tax credits, your production must meet one of the following local content thresholds:

Requirement TypeMinimum CriteriaLocal Spend RatioAt least 60% of total production expenses must be spent in New JerseyMinimum Qualified SpendAt least $1 million in qualified in-state expenses

Qualified expenses include:

• Hiring New Jersey-based cast and crew
• Equipment rentals and studio facilities
• Set construction, catering, lodging, transportation
• Post-production work performed in-state

In short: spend and hire locally, or no tax credit.

Bonuses That Reward Local Impact

Bonus TypeDetailsGeographic Bonus+5% tax credit for productions in South Jersey countiesDiversity Bonus+2% credit for employing women and/or minorities in key rolesStudio/Firm-Lease Partner StatusExtended benefits for studios that commit to NJ presence

Film vs. Digital Media: Two Tracks, One Goal

Legacy Film Tax Credit

• 30% base credit (35% in South Jersey)
• Designed for motion pictures, scripted TV, documentaries

Digital Media Tax Credit

• 35% base credit for digital content (VR, gaming, animation, web)
• Must meet same local content standards

Both tracks require pre-approval, compliance audits, and final certification from the New Jersey Economic Development Authority (NJEDA) and Motion Picture & Television Commission.

Why Local Content Matters for New Jersey

Unlike passive incentive models, New Jersey’s program is performance-based—meaning taxpayer dollars only support projects that deliver measurable returns to the state’s residents, workers, and small businesses.

• Job Creation
• Supplier & Vendor Contracts for NJ Businesses
• Community and Diversity Impact
• Infrastructure Investment

It’s a model that aligns private profit with public benefit—and it’s working

How to Apply

1. Review eligibility and determine your production’s compliance with local content thresholds
2. Submit application through the NJEDA Film Tax Credit Portal
3. Undergo audit & reporting on qualified spend and workforce data
4. Receive tax credit certificate (transferable/sellable to NJ taxpayers)

Frequently Asked Questions

Q: What qualifies as “local content” in the NJ film tax credit?
A: Any direct production expenditure made within New Jersey—including wages, rentals, lodging, and services—qualifies. Either 60% of total spend must be in-state, or $1 million minimum.

Q: Can I sell my NJ film tax credit?
A: Yes. The credits are transferable and can be sold to NJ-based taxpayers for liquidity.

Q: How long does approval take?
A: Applications are reviewed on a rolling basis. Pre-approval is required before principal photography or production begins.

Q: Do digital media projects qualify?
A: Yes. Web series, VR/AR, video games, animation, and interactive content are eligible under the Digital Media Tax Credit track.

Bottom Line: Tax Credit Meets Economic Impact

New Jersey’s Film and Digital Media Tax Credit Program isn’t just an incentive—it’s a commitment to local content, community reinvestment, and sustainable growth. Productions that meet the requirements don’t just save money—they help power a state-wide creative economy that’s open for business.

Ready to roll cameras in the Garden State?
Visit the NJ Motion Picture & Television Commission to get started.