State audit praises EDA’s efforts in administering film tax credit program

this New Jersey Economic Development Authority The state auditor received high praise for its application of the New Jersey Film Tax Credit Program, a key initiative of Governor Phil Murphy’s administration that was re-enacted in the summer of 2018 as the Garden State Film and Digital Media Jobs Act.

The report, prepared by state Auditor David Kaschak and released Thursday, examined the period from July 1, 2020, to Dec. 31, 2023. During that period, the EDA approved 151 film and digital media projects with a total estimated tax credit of $704.9 million, the report said.

The report gave high praise to EDA’s efforts.

“We found that the New Jersey Economic Development Authority has implemented adequate controls to approve eligible projects, monitor the projects, and certify tax credits in accordance with internal requirements, applicable program standards, and the laws governing the projects,” the report said.

“In making these determinations, we identified that legislation may be necessary to increase the economic benefits of the program to the state. We also noted deficiencies related to the expenditure certification process and the fees collected to cover the program’s administrative costs that warrant management attention.”

In the report, Kaschak said the review included program eligibility for approved film and digital media projects, as well as non-wage qualified film production expenses (qualified expenses) for certified film tax credits.

The goal of the program is to incentivize production companies to film and produce digital media content in the state. The program does this by providing transferable corporate business tax and gross receipts tax credits for qualified expenses incurred in producing certain motion pictures and digital media content in New Jersey.

EDA CEO Tim Sullivan is clearly excited about the audit.

“The results of this audit clearly demonstrate that the investments we have made under Governor Murphy’s leadership are paying off and that EDA has proven itself to be a strong steward of taxpayer resources,” he said.

“The Governor and the Legislature have invested heavily in the growth of New Jersey’s film and television industries, creating thousands of jobs and attracting billions of dollars in private investment, and our taxpayers can be assured that we will be held accountable for how these resources are spent. We thank the State Auditor and his team for conducting a thorough and efficient audit.”