“Lights, Camera, Action and Tax Cut!” – The California Film Commission Adopts New Regulations

The California Film Commission has recently adopted new regulations effective on April 13, 2015 (i.e., Cal. Code Regs. §§ 5508, 5509, 5510, 5511, 5512, 5513, 5514, 5515, and 5516, Tit. 10) to implement the California Film & Television Tax Credit Program 2.0, including but not limited to guidance in connection to expanded definitions; the application process for tax credit allocations; the eligibility determination; the qualified production expenditures; the approved applicant responsibility; the credit certificate issuance process; the job ratio ranking process; and the on screen credit and promotional requirements.

The new regulations implement the new California Film & Television Tax Credit Program under the corporate income and franchise tax laws and the personal income tax laws that were enacted by the 2014 legislation (i.e., A1839, c. 413). As a synopsis, the 2014 legislation represented a true paradigm shift from the previous program as it more than tripled the size of the California Film & Television Tax Credit Program funding from $100 million to $330 million and it expanded a range of project types that were previously ineligible. The primary changes from the prior program include:

• Increases tax credit program funding from $100 million to $330 million; extended for 5 years;

• Expands eligibility to big-budget feature films, 1-hr TV series (i.e., for any distribution outlet) and TV pilots;

• Eliminates budget caps for studio and independent films;

• Replaces lottery selection with a ranking system based on jobs and other criteria; and

• Adds a 5% “Uplift” for productions that film outside the 30-Mile Zone, as well as for visual effects and music scoring/recording performed in-state.

Please connect with Peter J. Scalise on TaxConnections, for a complimentary consultation on the scope and application of the new California Film & Television Tax Credit Program 2.0 and for tax policy commentary and legislative updates.

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About the Author
Peter J. Scalise serves as the National Partner-in-Charge of the Federal Tax Credits and Incentives Practice at SAX CPAs LLP. Peter is a highly distinguished member of the Accounting Today Top 100 Influencers and has approximately thirty years of progressive Big 4 and Top 100 public accounting firm experience developing, managing, and leading large scale tax advisory practices on a regional, national, and global level.
Peter also serves as a passionate philanthropist and a member of several Boards of Directors and Boards of Advisors for local, regional, and national charities in connection with poverty and hunger alleviation; economic development; environmental conservation; health and social services; supporting veteran and military service personnel along with preserving arts and cultural programs.

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