California Code of Regulations
Title 10 - Investment
Chapter 7.75 - California Film Commission
Article 1 - California Film and Television Tax Credit Program
Section 5501 - Application Process for Tax Credit Allocation

Universal Citation: 10 CA Code of Regs 5501

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) The open allocation periods for the California Film & Television Tax Credit Program shall be announced by the Director of the CFC prior to each new fiscal year. The California fiscal year is from July 1 to June 30. The announcement shall include a description of the application process and the application filing.

(b) Applications will be accepted on a first-come, first-served basis as determined by the date applications are received by the Director of the CFC. In the event that more than one application is received on the same date, a random selection process administered by the Director of the CFC shall determine the order of all applications received on the same date.

(c) Applicants for the tax credit allocation shall complete and submit the California Film & Television Tax Credit Program Application Form, CFC Form A (Rev. 05/03/2012), hereby incorporated by reference. One hard copy and one electronic copy in Portable Document Format (PDF).

(1) Completed applications shall be submitted at least thirty (30) calendar days prior to the start of Principal Photography in California. Any expenditures for services, wages, or goods incurred prior to application approval will not be considered Qualified Expenditures.

(2) An Applicant shall not submit duplicate applications for a project. Submittal of duplicate applications shall be good cause to disqualify an applicant from the tax credit program.

(3) A Television Series, shall submit one application for the entire Television Season of that Television Series.

(4) Incomplete applications shall not be eligible for tax credit allocation. The Director of CFC shall notify the Applicant of any deficiencies and shall require all information to be submitted within five (5) business days of notification or the application may be removed from the queue.

(d) The initial application shall include the following supporting documentation:

(1) A Budget for the Qualified Motion Picture Project that shall include:
(A) A Budget indicating the Qualified Expenditures, minus financing cost. One hard copy and an electronic copy in an industry standard budgeting program. If completion bond fees affect the eligibility of a production to qualify for the California Film & Television Tax Credit Program, the costs are allowed to be deducted from the Budget. If the applicant omits the completion bond fee for the purpose of falling below the ten million dollar ($10,000,000) or the seventy-five million dollar ($75,000,000) thresholds, the completion bond fee shall not be considered a Qualified Expenditure.

(B) A Television Series shall be allowed to submit a pattern budget including all amortization costs, in lieu of documents required in subsection (d)(1)(A) above.

(2) One-Line schedule ("production board"). One hard copy and one electronic copy in PDF.
(A) A Television Series shall be allowed to submit a production calendar, including the start and end dates of the season, the number of in-state and out-of-state principal photography days, and the total number of episodes, in lieu of a one-line shooting schedule.

(3) Synopsis of the screenplay, teleplay or series. One hard copy and one electronic PDF or Word document.

(4) Screenplay for the production, one electronic copy in PDF. If for confidentiality a script is not publicly available, submit a one-line schedule in continuity order.

(5) Include supporting documentation which confirms at least 60% of financing as provided for in the application, Section 4, Financing Sources. Applicant shall include documentation for each financing source e.g., commitment letters, financing agreements, term sheets, bank statements. Applications submitted without sufficient documentation will be considered incomplete and returned to applicant.

(6) Relocation Statement. For a TV Series that has filmed all of its prior season(s) outside of California (minimum of six (6) episodes), and intends to relocate to California, the applicant shall supply a certification stating that the tax credit provided is the primary reason for relocating. The certification shall be signed by the Qualified Taxpayer or a representative of the Qualified Taxpayer.

(e) Once it is determined that credits are available, the Applicant shall be notified and required to submit the following additional supporting documentation in a secure electronic format as specified by the CFC:

(1) Detailed Narrative Statement: Please provide a written statement on letterhead which describes the extent to which the credit is expected to influence or affect choice of filming location with respect to financial and business considerations. These may include hiring, and/or salary decisions, and should state to what degree the tax credit effects decision making with respect to choice of location.

(2) For applicants that are a partnership or single member LLC that is disregarded pursuant to Revenue and Tax Code section 23038 and that are not more than 25% owned by a publicly traded company provide:
(A) Financial information, if available, including but not limited to the most recently produced balance sheets, annual statements of profits and losses, audited or unaudited financial statements, summary budget projections or results. This information is not subject to public disclosure.

(B) The names of all partners in a partnership or names of all members of a limited liability company (classified as a partnership not publicly traded for California income tax purposes). This information is not subject to public disclosure.

(3) For applicants that are publicly traded companies or affiliates of publicly traded companies provide:
(A) A listing of all members of the applicant's most recently filed California combined reporting group and any members to which the credit is assigned.

(B) If readily available a listing of all states, provinces or other jurisdictions in which any of those members finance motion picture productions.

(f) Within 20 business days of receipt of the completed application and all requested supporting documents, the Director of the CFC will notify the applicant of accepted or rejected status. An approved application shall meet the Eligibility Requirements in Section 5502 of these regulations. Upon approval, a Credit Allocation Letter, CFC Form D, (Rev. 9/1/2009), hereby incorporated by reference, shall be issued to the applicant indicating the amount of tax credits reserved, as provided in Section 5504.

(g) Not less than four (4) weeks prior to the start of principal photography, the production accountant is required to attend an orientation meeting with the Director of the CFC or his/her designee, along with any or all of the following staff members: a primary producer, unit production manager, or other appropriate personnel.

(h) Any Television Series that has been approved and issued a Credit Allocation Letter, shall be placed at the top of the queue for an open allocation period in each subsequent year in the life of that series whenever credits are assigned within a fiscal year. Queue placement in subsequent years will be based on the year of original application and original queue number assigned for that series. Each television series must submit a new application for each season prior to any open application period.

(i) Principal Photography shall commence no later than 180 calendar days after the Credit Allocation Letter is issued. If the production does not begin filming prior to the 180-day deadline, the tax credit allocation shall be revoked. If a production implements a hiatus during the principal photography period, any and all hiatus period(s) may be no longer than 100 calendar days in aggregate for the entire duration of the production.

1. New section filed 5-29-2009 as an emergency; operative 5-29-2009 (Register 2009, No. 22). A Certificate of Compliance must be transmitted to OAL by 11-25-2009 or emergency language will be repealed by operation of law on the following day.
2. Editorial correction of HISTORY 1 (Register 2009, No. 47).
3. New section refiled 11-19-2009; operative 11-19-2009 (Register 2009, No. 47). A Certificate of Compliance must be transmitted to OAL by 2-17-2010 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 11-19-2009 order transmitted to OAL 2-3-2010; disapproved by OAL on 3-18-2010 and order of repeal as to 11-19-2009 order filed on 3-19-2010 (Register 2010, No. 12).
5. New section refiled 3-18-2010 as an emergency; operative 3-18-2010 (Register 2010, No. 12). A Certificate of Compliance must be transmitted to OAL by 6-16-2010 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 3-18-2010 order, including amendment of section, transmitted to OAL 4-15-2010 and filed 5-19-2010 (Register 2010, No. 21).
7. Amendment of subsections (c), (d)(5) and (h) and repealer of subsection (d)(7) filed 3-16-2011; operative 4-15-2011 (Register 2011, No. 11).
8. Amendment of subsections (c), (c)(4), (d) and (d)(2), new subsections (e)-(e)(3)(B), subsection relettering and amendment of NOTE filed 7-19-2012; operative 8-18-2012 (Register 2012, No. 29).

Note: Authority cited: Sections 17053.85(e), 17053.85(g), 23685(e) and 23685(g), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.85(g) and 23685(g), Revenue and Taxation Code; and Section 14998.1, Government Code.

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