Netflix in line for millions in tax credits for New Jersey production studio

Netflix is in line to receive additionally millions from New Jersey as it moves forward with plans to build one of the world' biggest production studios at Fort Monmouth.

On Friday, June 28, state lawmakers approved a bill that would increase the amount of tax credits to $200 million (£158m) available to Netflix and other movie and television producers.

It also would allow the New Jersey Economic Development Authority to provide financial help to production companies' facilities.

This is part of Governor Phil Murphy's plan to improve the state's innovation economy.

In December 2022, Netflix signed a contract to purchase 300 acres of Fort Monmouth for $55m (£43m), and its deadline to complete due diligence has been extended to September 14, 2023.

The streaming giant plans to invest $850m (£670m) to construct 12 sound stages, multiple ancillary buildings, and back lots similar in size and scope to its New Mexico studios.

The development project is expected to create as many as 3,500 construction jobs. Upon completion, it would create up to 2,200 jobs a year with an estimated economic impact of $7.4 billion - $8.9bn over 20 years ($370m - $445m per year).

In 2022, film companies spent more than $650m (£512m) in the state, up from $500m (395m) in 2021 according to the New Jersey Motion Picture and Television Commission.

However, the rush to pass the bill has led many to doubt its accuracy.

Peter Chen, a senior policy analyst with New Jersey Policy Perspective told Gothamist: "We've been told that there are substantial technical problems with the bill, that the math doesn't add up, and there will have to be substantial corrections."

While it’s not uncommon for the legislature to clean up the budget bill after the fact, this year's bill has been described as particularly unclear. 

"One of the biggest problems is we can't be sure that this is actually the budget," Chen said.

New Jersey Policy Perspective, a left-leaning research group, that said it would cost the state $200 million and subsidise an industry that already is profitable, and allowing the economic development authority to make capital investments could make the state a financial partner in an otherwise privately funded development.

In a report, the group said: "If these ventures are profitable, then they should not need state subsidies. If they are not profitable, the state should not be propping them up and liable for losses if the studios fold."