The California Film & Television Tax Credit Program, in effect since 2009, offers 20-25% tax credits to eligible productions. Program guidelines and application instructions can be found at the incentives section of the California Film Commission's website.
How does the tax credit work?
Qualified taxpayers are allowed a credit against income and/or sales and use taxes, based on qualified expenditures, for taxable years beginning on or after January 1, 2011. Credits applied to income tax liability are not refundable. Only tax credits issued to an “independent film” may be transferred or sold to an unrelated party. Other qualified taxpayers may carryover tax credits for 5 years and transfer tax credits to an affiliate.
How much was allocated to the program?
- $100 million annually beginning fiscal year 2009/2010 through fiscal year 2016/2017
- $10 million of the annual funding will be set aside for independent films each year
What types of productions qualify for the program?
To apply for the California Film and Television Incentive Program, a “qualified motion picture” must be one of the following:
- Eligible for 20% tax credit:
- Feature Films ($1 million - $75 million production budget)
- Movies of the Week or Miniseries ($500,000 minimum production budget)
- New Television series licensed for original distribution on basic cable ($1 million minimum budget; one-half hour shows and other exclusions apply)
- Eligible for 25% tax credit:
- A television series, without regard to episode length, that filmed all of its prior seasons outside of California
- An "independent film" ($1 million - $10 million budget that is produced by a company that is not publicly traded and that is not more than 25% owned by publicly traded companies)
A "qualified motion picture" must also meet the following conditions:
- 75% test (production days or total production budget) in California
- Application must be submitted at least 30 days prior to principal photography
- Once an application is approved, principal photography must begin with 180 days and post production must be completed within 30 months
Please visit the California Film Commission's website for details on application procedures as well as guidance on qualified expenditures and program requirements.