Bill Text: NJ S3503 | 2024-2025 | Regular Session | Introduced
Bill Title: Provides corporation business and gross income tax credit for certain Pre-Broadway and Post-Broadway theater productions.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-06-26 - Introduced in the Senate, Referred to Senate Community and Urban Affairs Committee [S3503 Detail]
Download: New_Jersey-2024-S3503-Introduced.html
Sponsored by:
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Provides corporation business and gross income tax credit for certain Pre-Broadway and Post-Broadway theater productions.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a tax credit for certain theater productions and supplementing P.L.1945, c.162 and chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer that is a production company shall be allowed a credit against the tax due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to 35 percent of the production and performance expenditures incurred by the taxpayer for an accredited theater production.
b. (1) The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period shall be as prescribed by the Director of the Division of Taxation in the Department of the Treasury.
(2) The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability for a privilege period to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).
(3) The amount of the credit otherwise allowed under this section that cannot be applied for the privilege period due to the limitations of this subsection, or under other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.), may be carried forward, if necessary, to the three privilege periods following the privilege period for which the tax credit was allowed.
c. To receive the tax credit allowed pursuant to this section, a taxpayer that is a production company of an accredited theater production shall apply to the authority in such form and manner as prescribed by the authority. In addition to any other information that the authority deems appropriate, the application shall include information detailing:
(1) the accredited theater production, including the dates on which the production was performed at a qualified production facility and New York City's Broadway theater district, respectively;
(2) the qualified production facility at which such production was performed; and
(3) the production and performance expenditures incurred for the accredited theater production.
d. The authority may approve applications on a rolling basis, subject to the availability of authorized credits. If the authority approves an application, the authority shall issue a notice of initial certification to the taxpayer and the director. The director shall make a determination, no later than 30 days after receiving the initial certification, concerning the issuance of a final certification of tax credits to the taxpayer.
e. The total value of tax credits approved by the director pursuant to this section and section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed a cumulative total of $10 million in any one fiscal year.
f. No later than 12 months following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and annually thereafter, the authority shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature that, at a minimum, details the applications submitted pursuant this section and section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), including each production company that applied for tax credits, the status of each application, the accredited theater production and qualified production facility to be supported by each applicant, and the amount of any credits awarded to each approved applicant.
g. As used in this section:
"Accredited theater production" means a for-profit live stage presentation that is a pre-Broadway production or a post-Broadway production and is performed at a qualified production facility.
"Advertising and public relations expenditures" means costs incurred within the State by a production company for goods or services related to the national marketing of, public relations for, or creation and placement of print, electronic, television, billboard, and other forms of advertising to promote the accredited theater production.
"Authority" means the New Jersey Economic Development Authority.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Payroll" means all salaries, wages, fees, and other compensation, including related benefits for services performed within the State, not exceeding $250,000 per week.
"Post-Broadway production" means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and opens its national tour in the State following a performance or performances of such presentation in New York City's Broadway or off-Broadway theater districts.
"Pre-Broadway production" means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and with an intended purpose of being presented in New York City's Broadway theater district.
"Production and performance expenditures" means a contemporaneous exchange of cash or cash equivalent for goods or services related to the development, production, or performance of, or operating expenditures incurred in the State for, an accredited theater production, including, but not limited to: (1) expenditures for design, construction, and operation, including sets, special and visual effects, costumes, wardrobe, make-up, and accessories; (2) costs associated with sound, lighting, staging, facility expenses, rentals, per diems, and accommodations; and (3) payroll, advertising, and public relations expenditures and transportation expenditures.
"Qualified production facility" means a facility located in the State and in which live stage presentations are, or are intended to be, exclusively performed, and that contains at least one stage, a seating capacity of 350 or more seats and dressing rooms, storage areas, and other ancillary amenities necessary for an accredited theater production.
"Transportation expenditures" means expenditures for: (1) the packaging, crating, and transporting, to and from the State, of sets, costumes, and other tangible property and equipment used or to be used in an accredited theater production; and (2) the transporting of cast and crew members of an accredited theater production to and from the State. This term shall not include any costs for the transporting of tangible property and equipment that are or will be used only for staging a production other than the accredited theater production, any indirect costs or expenditures that are or will be reimbursed by a third party, or any amounts that are paid to an individual or entity as a result of such individual's or entity's participation in profits from the exploitation of an accredited theater production.
2. a. A taxpayer that is a production company shall be allowed a credit against the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 35 percent of the production and performance expenditures incurred by the taxpayer for an accredited theater production.
b. (1) The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. The amount of the credit applied under this section against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero.
(2) The amount of the credit otherwise allowed under this section that cannot be applied for the taxable year due to the limitations of this subsection, or under other provisions of the "New Jersey Gross Income Tax Act" N.J.S.54A:1-1 et seq., may be carried forward, if necessary, for three taxable years following the taxable year for which the tax credit was allowed.
c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the tax credit directly under N.J.S.54A:1-1 et seq., but the amount of credit of the taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
(2) A taxpayer that is a New Jersey S corporation shall not be allowed the tax credit directly under N.J.S.54A:1-1 et seq., but the amount of credit of a taxpayer in respect of a pro-rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro-rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer's taxable year.
d. To receive the tax credit allowed pursuant to this section, a taxpayer that is a production company of an accredited theater production shall apply to the authority in such form and manner as prescribed by the authority. In addition to any other information that the authority deems appropriate, the application shall include information detailing:
(1) the accredited theater production, including the dates on which the production was performed at a qualified production facility and New York City's Broadway theater district, respectively;
(2) the qualified production facility at which such production was performed; and
(3) the production and performance expenditures incurred for the accredited theater production.
e. The authority may approve applications on a rolling basis, subject to the availability of authorized credits. If the authority approves the application, the authority shall issue a notice of initial certification to the taxpayer and the director. The director shall make a determination, no later than 30 days after receiving the initial certification, concerning the issuance of a final certification of tax credits to the taxpayer.
e. The total value of tax credits approved by the director pursuant to this section and section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed a cumulative total of $10 million in any one fiscal year.
f. No later than 12 months following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and annually thereafter, the authority shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature that, at a minimum, details the applications submitted pursuant this section and section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), including each production company that applied for tax credits, the status of each application, the accredited theater production and qualified production facility to be supported by each applicant, and the amount of any credits awarded to each approved applicant.
g. As used in this section:
"Accredited theater production" means a for-profit live stage presentation that is a pre-Broadway production or a post-Broadway production and is performed at a qualified production facility.
"Advertising and public relations expenditures" means costs incurred within the State by a production company for goods or services related to the national marketing of, public relations for, or creation and placement of print, electronic, television, billboard, and other forms of advertising to promote the accredited theater production.
"Authority" means the New Jersey Economic Development Authority.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Payroll" means all salaries, wages, fees, and other compensation, including related benefits for services performed within the State, not exceeding $250,000 per week.
"Post-Broadway production" means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and opens its national tour in the State following a performance or performances of such presentation in New York City's Broadway or off-Broadway theater districts.
"Pre-Broadway production" means a live stage presentation that, in its original or adaptive version, is performed at a qualified production facility and with an intended purpose of being presented in New York City's Broadway Theater.
"Production and performance expenditures" means a contemporaneous exchange of cash or cash equivalent for goods or services related to the development, production, or performance of, or operating expenditures incurred in the State for, an accredited theater production, including, but not limited to: (1) expenditures for design, construction and operation, including sets, special and visual effects, costumes, wardrobe, make-up, and accessories; (2) costs associated with sound, lighting, staging, facility expenses, rentals, per diems, and accommodations; and (3) payroll, advertising, and public relations expenditures and transportation expenditures.
"Qualified production facility" means a facility located in the State and in which live stage presentations are, or are intended to be, exclusively performed, and that contains at least one stage, a seating capacity of 350 or more seats and dressing rooms, storage areas, and other ancillary amenities necessary for an accredited theater production.
"Transportation expenditures" means expenditures for: (1) the packaging, crating, and transporting, to and from the State, of sets, costumes, and other tangible property and equipment used or to be used in an accredited theater production; and (2) the transporting of cast and crew members of an accredited theater production to and from the State. This term does not include any costs for the transporting of tangible property and equipment that are or will be used only for staging a production other than the accredited theater production, any indirect costs or expenditures that are or will be reimbursed by a third party, or any amounts that are paid to an individual or entity as a result of such individual's or entity's participation in profits from the exploitation of an accredited theater production.
3. This act shall take effect immediately and shall apply to privilege periods and taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill provides corporation business tax and gross income tax credits to production companies for costs incurred for certain accredited theater productions.
Specifically, the bill provides that a production company may receive tax credits for costs related to eligible pre- and post-Broadway theater productions that are performed at qualified facilities in New Jersey. The credits would equal 35 percent of the production's eligible production and performance expenditures. Under the bill, production and performance expenditures include: (1) expenditures for design, construction, and operation, including sets, special and visual effects, costumes, wardrobe, make-up, and accessories; (2) costs associated with sound, lighting, staging, facility expenses, rentals, per diems, and accommodations; (3) payroll costs up to $250,000 per week; and (4) certain advertising and public relations expenditures and transportation expenditures.
The bill requires production companies to apply to the New Jersey Economic Development Authority for the initial approval of tax credits. However, the bill provides that the Director of the Division of Taxation in the Department of the Treasury would be responsible for the final approval of tax credits. Under the bill, the total value of tax credits awarded in each fiscal year may not exceed $10 million.
