Film & TV Tax Credit Program 3.0
Tax Credit Program 3.0
The California Film & Television Tax Credit Program 3.0 was signed into law by Governor Brown on June 27, 2018. The California Film Commission (CFC) developed regulations, program guidelines, and other procedures to administer the newly extended tax credit program (Program 3.0) which will go into effect July 1, 2020.
The new Program 3.0 will enable CFC to allocate $330 million per year from July 2020 through June 2025. The current Program 2.0 sunsets in June 2020.
GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT
California Film and Television Tax Credit Program 3.0
Title 10, Chapter 7.75, Sections 5520-5528
NOTICE OF PROPOSED RULEMAKING
June 25, 2019
Notice is hereby given that the California Film Commission proposes to adopt the proposed regulations described below after considering all comments, objections and recommendations regarding the proposed action.
Proposed Regulatory Action
The Office proposes to adopt new sections 5520 through 5528 in Title 10 of the California Code of Regulations in order to implement, interpret and make specific Revenue and Taxation Code sections 17053.98 and 23698 relating to a film and television tax credit program. No public hearing is scheduled; however, any interested person or his or her duly authorized representative may request a public hearing no later than fifteen (15) days prior to the close of the public comment period.
Written Comment Period
Any interested person, or his or her authorized representative, may submit written comments relevant to the proposed regulatory action to the Agency. Written comments will be accepted by the Agency until August 19, 2019. Submit comments to:
Name: Nancy Rae Stone
Address: California Film Commission, 7080 Hollywood Boulevard, Hollywood, CA 90028
Authority and Reference
The proposed regulation has been adopted under the authority of Government Code section 11152, and Revenue and Taxation Code sections 17053.98(e) and 23698(e) and in order to implement, interpret and make specific Revenue and Taxation Code sections 17053.98 and 23698.
- Creates a pilot program for training Californians from under-served communities for careers in the skilled craft occupations in motion picture and television productions. Program is funded by a fee accessed on approved applicants. The current Career Readiness requirement, where approved projects must participate by providing career exposure opportunities such as paid internships and in-class workshops, will remain intact.
- Reduces proportion of credits for the relocating TV category (from 20% to 17%), increases the amount of credits for the independent film category (from 5% to 8%), and splits the independent film “pot” into two categories – under $10 million and over $10 million budgets. This will allow more access into the program for smaller budgeted independent films and more funding overall for independent films.
- Allows an additional 5% credit on wages paid to individuals who live and work on qualified productions outside the Los Angeles 30-mile zone. This will encourage more filming in regions throughout the state. To date, more than $76 million has been spent outside the Los Angeles area by approved projects in counties including: Alameda, Contra Costa, Humboldt, Marin, Orange, Riverside, San Bernardino, Santa Cruz, San Diego, Solano, Sonoma, and Ventura.
- Requires approved applicants to provide and maintain a written policy against unlawful harassment, which includes procedures for reporting and investigating harassment claims, and a statement that the company will not retaliate against an individual who reports harassment.
- Requires applicants to provide a copy of their initiatives and programs to increase the representation of minorities and women in job classifications that are excluded from qualified wages (directors, producers, writers, actors).
- Requires applicants to provide statistics on the gender, racial, and ethnic status of individuals whose wages are not qualified (directors, producers, writers, actors).
- Eliminates “facility” (sound stage) from bonus point consideration.
- Eliminates the additional 5% credit for music scoring wages; includes music wages as a bonus point factor.
- Extends the date by which principal photography must begin from 180 days to 240 days for projects with budgets over $100M qualified spend.
- Jobs Ratio overstatement penalty threshold of independent productions has been reduced to match non-independent productions.