Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
The amount of tax credit allocated shall be based on the percentage of the qualified
expenditures as provided in sections
17053.98(a)
and
23698(a)
of the Revenue and Taxation Code.
(b)
(1) For fiscal years 2021-22 and 2022-23, an
additional fifteen million dollars ($15,000,000) in credits will be granted
exclusively to a television series that relocated to California and seventy-five
million dollars ($75,000,000) in credits will be granted exclusively to recurring
television series.
(2) Once the
aggregate amount of credits that may be allocated for a fiscal year is determined
pursuant to subdivision (b), the amount of credits available for each classification
of production described in 17053.98(i)(2) and 23698(i)(2) shall be determined as
follows:
(A) Any television series, relocating
television series or new television series based on a pilot for a new television
series that has been previously approved and issued a credit allocation by the CFC
under Revenue and Taxation Code sections
17053.85,
17053.95,
17053.98,
23685,
23695
or
23698
shall be issued a credit for that fiscal year.
(B) After the amount of credits necessary to
satisfy the credit described in paragraph (1) are subtracted from the total
aggregate amount of credits available for the fiscal year, that remaining amount
shall be distributed by type of production according to the percentages and in the
manner described in Revenue and Taxation Code section
17053.98(i)(2)
and
23698(i)(2).
The amounts distributed pursuant to this subparagraph shall not exceed $115,500,000
for feature films, $56,100,000 for relocating television series, $10,560,000 for an
independent film with a qualified expenditure budget exceeding $10,000,000, and
$15,840,000 for independent films with a qualified expenditure budget less than or
equal to $10,000,000. In the event that projects drop out, funds will be allocated
to the waitlisted projects in the category from which the credits were sourced. If
there are no waitlisted projects, the funds will be distributed in the manner
described in Revenue and Taxation Code section
17053.98(g)(2)(D)(v)
and 23698(g)(2)(D)(v).
(c) If all tax credits have been allocated for any
application period, qualified motion pictures shall be placed in a prioritized
waiting list according to their project type and in the order of their jobs ratio
ranking until one of the following occurs: credits become available that allocation
period, the production elects to be removed from the queue, or until the allocation
period ends.
(d) If the applicant is
producing a series of feature films that will be filmed concurrently and the series
of films continues the narrative of the original work and financing is confirmed,
then the CFC shall have the authority to divide the allocation over multiple fiscal
years if it is determined that the production schedule occurs over more than one
fiscal year.
(e) For the purposes of
this section, a five percent (5%) augmentation ("uplift") to the tax credit
allocation for non-independent motion pictures (excluding relocating television
series in its first season in California) shall be made by the CFC when any of the
following conditions have been met:
(1) The
production company pays or incurs qualified expenditures relating to qualified
visual effects work totaling a minimum of ten million dollars ($10,000,000) is
incurred in California or at least seventy-five percent (75%) of total worldwide
visual effects expenditures is incurred in California.
(2) The production company pays or incurs
qualified wages for services performed outside the Los Angeles zone during the
applicable period relating to original photography outside the Los Angeles zone by
individuals who reside within the Los Angeles zone. The foregoing amounts shall be
substantiated by documentation including, but not limited to, timesheets and payroll
records as requested by the CFC and/or the CPA performing the Agreed Upon
Procedures.
(3) The production company
purchases or leases tangible personal property outside the Los Angeles zone during
the applicable period and the personal property is used or consumed outside the Los
Angeles zone. Tangible personal property must be purchased, rented or leased from an
outside of Los Angeles vendor through an office or other place of business outside
the Los Angeles zone. Rentals or purchases from a pass-through business do not
qualify for the five percent (5%) augmentation.
(A) If the tangible personal property purchased or
leased outside the Los Angeles zone was not completely used or consumed solely
outside the Los Angeles zone, the production company shall apportion amounts paid or
incurred for tangible personal property outside the Los Angeles zone during the
applicable period by multiplying these non-wage outside the Los Angeles zone
expenditures by the ratio of days of principal photography outside the Los Angeles
zone to the total number of days of principal photography.
(B) If the tangible personal property purchased or
leased outside the Los Angeles zone was completely used or consumed solely outside
the Los Angeles zone, the production company may elect to substantiate that with its
records. Tangible person property purchased or leased outside the Los Angeles zone
shall be deemed to be completely used or consumed provided the property was of a
type or nature such that it would have no residual material value remaining after
its use or consumption outside the Los Angeles zone. Examples of such property
include, but are not limited to, food and catering items, rented hotel or corporate
housing usage, construction supplies and materials for sets, automotive or other
fuels, security services, location and stage services, government permit fees,
personnel services, printing, equipment rentals for the applicable period outside
the Los Angeles Zone, transportation services, dry cleaning, and shipping and travel
costs from within the state to and from the out of zone
location.
(f) A ten
percent (10%) augmentation ("uplift") for non-independent productions excluding
relocating TV series, is available if the production company pays or incurs
qualified wages for services performed by local hire labor outside the Los Angeles
zone during the applicable period relating to original photography outside the Los
Angeles zone. The foregoing amounts shall be substantiated by documentation
including but not limited to timesheets and payroll records as requested by the CFC
and/or the CPA performing the Agreed Upon Procedures.
(g) The maximum amount of tax credits allowed for
independent films and/or relocating television series for their initial season in
California is twenty-five percent (25%) and therefore the five percent (5%) uplift
is not applicable to such productions except for an additional five percent (5%)
uplift for local hire labor. As noted in section (f) above, documentation will be
required to determine if applicant qualifies for this uplift.
1. New section
filed 7-1-2020; operative 7-1-2020 pursuant to Government Code section
11343.4(b)(3)
(Register 2020, No. 27).
2. Amendment of subsection (b)(1) and new
subsections (b)(2)-(b)(2)(B) filed 8-17-2020 as an emergency; operative 8-17-2020.
Emergency expiration extended 60 days (Executive Order N-40-20) plus an additional
60 days (Executive Order N-66-20) (Register 2020, No. 34). A Certificate of
Compliance must be transmitted to OAL by 6-18-2021 or emergency language will be
repealed by operation of law on the following day.
3. Amendment of
subsection (b)(1) and new subsections (b)(2)-(b)(2)(B) refiled 6-14-2021 as an
emergency, including further amendment of subsection (b)(2)(B); operative 6-18-2021.
Emergency expiration extended 60 days (Executive Order N-40-20) plus an additional
60 days (Executive Order N-66-20) (Register 2021, No. 25). A Certificate of
Compliance must be transmitted to OAL by 1-14-2022 or emergency language will be
repealed by operation of law on the following day.
4. Certificate of
Compliance as to 6-18-2021 order, including further amendment of subsection (b)(1),
transmitted to OAL 12-29-2021 and filed 2-10-2022; amendments effective 2-10-2022
pursuant to Government Code section
11343.4(b)(3)
(Register 2022, No. 6).
Note: Authority cited: Sections
17053.98(a),
17053.98(e),
17053.98(i),
17053.98(j),
23698(a),
23698(e),
23698(i)
and
23698(j),
Revenue and Taxation Code; and Section
11152,
Government Code. Reference: Sections
17053.98
and
23698,
Revenue and Taxation Code; and Section
14998.1,
Government Code.
