“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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Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.

Peter is a highly acclaimed thought leader in the fields of accounting and taxation with deep subject matter expertise in connection to designing, implementing and defending sustainable methodologies for specialty tax incentives including, but not limited to, research tax incentives; orphan drug credits; therapeutic discovery credits; accounting methods and periods; energy tax incentives in connection to green building envelope efficiency and benchmarking, solar energy, bio energies, fuel cells, wind turbines, micro turbines, and geothermal systems; and comprehensive fixed asset analysis incorporating principles of construction tax planning, cost segregation analysis and the final treasury regulations governing tangible property.

Peter is a renowned keynote speaker and an extensively published author on specialty tax incentives, tax controversy matters, and legislative updates from Capitol Hill for NAREIT, AGRION, USGBC, AICPA, ASTP, NATP, ABA, AIA, and TEI. Peter serves as a member of the Tax Faculty for CPAacademy, iShade and TaxConnections University (“TCU”). Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable.

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