California Code of Regulations
Title 10 - Investment
Chapter 7.75 - California Film Commission
Article 4 - California Soundstage Filming Tax Credit Program
Section 5531 - Eligibility Determination

Universal Citation: 10 CA Code of Regs 5531

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

(a) The application process for the California Soundstage Filming Tax Credit Program has two phases:

(1) Phase A requires the applicant to complete and submit the online application set forth on the CFC website regarding certification of a studio construction project and to submit the Certified Studio Construction Project Verification report required pursuant to section 5532. A Phase B application shall not be submitted until the Phase A studio construction project has been certified and a Soundstage Certification Letter (SCL), Form SCL (August 12, 2022), hereby incorporated by reference, has been issued for each soundstage and ancillary building, or group of buildings, approved as part of the certified studio construction project.

(2) Phase B requires the applicant to complete and submit the online application set forth on the CFC website regarding the proposed motion picture production, as described in section 5533, and to submit the diversity workplan described in section 5534 for the motion picture production. An applicant shall not begin principal photography until it receives approval from the CFC for its Phase B-submission and receives a Credit Allocation Letter (CAL), Form SD (August 12, 2022), hereby incorporated by reference.

(b) Application Acceptance and Eligibility:

(1) Phase A applications will be accepted on a first come, first served basis until thirty (30) days after issuance of the production alert, required pursuant to section 5539(c), announcing that 75% of all funds have been allocated.

(2) Phase B applications, except for recurring television series, will be accepted on a first come, first served basis until all funds have been allocated.
(A) A motion picture may still be eligible for a tax credit under the California Film and Television Tax Credit Program 3.0 or its successor programs once all California Soundstage Filming Tax Credit Program funds have been allocated or if the motion picture is no longer eligible for the Soundstage Filming Tax Credit Program, if the motion picture meets the criteria specified in section 5539(h).

(3) Phase B applications for recurring television series that received a CAL for the first season of that television series in the California Soundstage Filming Tax Credit Program will be accepted on a first come, first served basis for the lifetime of such a television series.

(c) The soundstage or soundstages certified by the CFC as a certified studio construction project must meet the requirements of sections 17053.98(k)(2)(A), (k)(12)-(13) and 23698(k)(2)(A), (k)(12)-(13) of the Revenue and Taxation Code, as implemented in sections 5532 and 5538 of the California Code of Regulations, Title 10.

(d) If an applicant is planning to produce a qualified motion picture, then the applicant shall ensure that the qualified motion picture complies with the provisions of sections 17053.98(k)(2)(B) and 23698(k)(2)(B) of the Revenue and Taxation Code.

(1) Qualified wages for purposes of satisfying the criteria in sections 17053.98(k)(2)(B)(ii) and 23698(k)(2)(B)(ii) include wages for production services performed within the production period, as defined in sections 17053.98(b)(14) and 23698(b)(14) of the Revenue and Taxation Code, on soundstages and ancillary buildings certified as part of a certified studio construction project, as defined under section 5530, subdivisions (c) and (d).
(A) Wages related to maintenance of the soundstages and ancillary buildings certified as part of a certified studio construction project shall not be included for the purpose of satisfying the criteria in sections 17053.98(k)(2)(B)(ii) and 23698(k)(2)(B)(ii).

(B) Wages incurred for services performed at locations or facilities not included in the certified studio construction project shall not be included for the purpose of satisfying the criteria in sections 17053.98(k)(2)(B)(ii) and 23698(k)(2)(B)(ii).

(e) The qualified motion picture must be produced by an applicant, as defined in section 5530(b)(2), who is also a qualified taxpayer that meets the requirements in sections 17053.98(k)(2)(B)(iii) and 23698(k)(2)(B)(iii) of the Revenue and Taxation Code.

(f) Motion pictures that have previously received a tax credit allocation under Revenue and Taxation Code sections 17053.98(a)-(j) and 23698(a)-(j), for the fiscal year, are not eligible to receive an allocation under this Program.

(g) The applicant must provide and receive approval from the CFC for both a diversity workplan and diversity report, as described in sections 5534 and 5537, respectively.

(h) To qualify as a new television series, the television series shall produce episodes with a running time longer than forty (40) minutes, exclusive of commercials, and with a minimum production budget of one million dollars ($1,000,000.00) per episode.

(i) To qualify as a television series that relocated to California, the television series shall meet the following criteria:

(1) Provide a certification from the applicant that the tax credit provided pursuant to this section is the primary reason for relocating to California.

(2) Produce episodes of any length, filmed its most recent season outside of California, and have a minimum production budget of one million dollars ($1,000,000.00) per episode.

(3) At least 75 percent of principal photography days of its most recent season have been filmed outside of California.

(j) To qualify as a pilot for a new television series, the pilot episode shall have a running time longer than forty (40) minutes, exclusive of commercials, shall be produced in California with a minimum budget of one million dollars ($1,000,000), and shall be the initial episode in a proposed television series.

(k) An animated production is not considered a qualified motion picture and shall not be eligible for a tax credit. Animated production means content created that does not utilize or incorporate live action footage but creates a motion picture consisting principally of computer generated or hand painted images. An animated production does not engage in principal photography and therefore does not meet the conditions for eligibility set forth in sections 17053.98(k)(2)(B) and 23698(k)(2)(B) of the Revenue and Taxation Code.

(l) A feature film or a season of a series may not be allocated more than the cap sum specified in sections 17053.98(k)(8)(B) and 23698(k)(8)(B) of the Revenue and Taxation Code. Recurring television series that previously received an allocation under this Program for a season shall not be allocated more than that cap sum for subsequent seasons that qualify for this Program.

(m) Tax credits under this Program for an independent film, as defined in sections 17053.98(b)(6) and 23698(b)(6) of the Revenue and Taxation Code, shall be applied to a maximum of ten million dollars ($10,000,000.00) of the qualified expenditure budget. There shall be no maximum on the production budget.

(n) Any television series, relocated television series and any television series based on a pilot that has been approved and issued a Credit Allocation Letter under the California Soundstage Filming Tax Credit Program, shall be given first priority for a credit allocation as a recurring television series in each subsequent year in the life of that series for as long as credits are available. When credits are no longer available for the California Soundstage Filming Tax Credit Program, a recurring television series initially allocated tax credits from this Program and seeking an allocation of credits for a subsequent season shall receive an allocation of credits from the California Film and Television Tax Credit Program 3.0 or its successor programs, pursuant to sections 17053.98(k)(8)(E), 17053.98(k)(8)(G)(ii), 23698(k)(8)(E) and 23698(k)(8)(G)(ii) of the Revenue and Taxation Code.

(1) Each recurring television series shall submit a new application and pick-up order, if available, for each season. The application shall reflect the estimated qualified expenditures, but the allocation will not exceed the amount approved in the previous season's credit allocation letter(s). The narrative statement requirement as set forth in sections 17053.98(g)(2)(A)(viii) and 23698(g)(2)(A)(viii) of the Revenue and Taxation Code for all projects shall be deemed as met for recurring television series with the statement submitted by that series when it was accepted into this Program as a pilot, new or relocating television series.

(2) The allocation amount requested by a relocating television series applying for tax credits in subsequent fiscal years as a recurring television series shall not exceed the amount approved in the previous season's credit allocation letter(s).

Note: Authority cited: Sections 17053.98(k)(10) and 23698(k)(10), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.98(k)(2)(B), 17053.98(k)(3), 17053.98(k)(4), 17053.98(k)(8), 17053.98(k)(9), 17053.98(k)(12)-(13), 17053.98(a), 17053.98(b), 17053.98(g), 23698(k)(2)(B), 23698(k)(3), 23698(k)(4), 23698(k)(8), 23698(k)(9), 23698(k)(12)-(13), 23698(a), 23698(b) and 23698(g), Revenue and Taxation Code; and Section 14998.1, Government Code.

Note: Authority cited: Sections 17053.98(k)(10) and 23698(k)(10), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.98(k)(2)(B), 17053.98(k)(3), 17053.98(k)(4), 17053.98(k)(8), 17053.98(k)(9), 17053.98(k)(12)-(13), 17053.98(a), 17053.98(b), 17053.98(g), 23698(k)(2)(B), 23698(k)(3), 23698(k)(4), 23698(k)(8), 23698(k)(9), 23698(k)(12)-(13), 23698(a), 23698(b) and 23698(g), Revenue and Taxation Code; and Section 14998.1, Government Code.

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