California’s Newly Expanded Film/TV Tax Credit Gains Two More Relocating TV Series

Increased Funding Provided by SB 144 Yields Fast Results with Projects from Georgia and Vancouver

Hollywood, Calif. — October 25, 2021 — Recent legislation to expand California’s Film & TV Tax Credit Program is delivering quickly on one of its core goals by incentivizing more TV series to relocate production here from other states and nations.

The California Film Commission today announced that ABC’s “Promised Land” and the Disney+ series “Mysterious Benedict Society” will relocate to the Golden State with tax credits provided by the passage of Senate Bill 144.

Signed into law by Governor Gavin Newsom on July 21, SB 144 has several key provisions including an additional $15 million per year (for two years) increase in tax credits reserved specifically for relocating TV series, bringing total annual funding for relocating series to $71.1 million (up from $56.1 million). In addition, the criteria to qualify as a relocating TV series has been relaxed to include series that filmed their pilot episode out-of-state (the tax credit program previously required relocating series to film an entire season out-of-state).

“The new expansion of our tax credit program is working to bring more jobs, spending and opportunity to California,” said California Film Commission Executive Director Colleen Bell. “Production here in California continues to rebound from the pandemic, and the decisive action from our policymakers in Sacramento is helping to fuel that success.”

“Promised Land” is relocating from Georgia while “Mysterious Benedict Society” is relocating from Vancouver — locales that have hosted other TV series that relocated to California via the tax credit program. In recent years, one prior series (“Good Girls”) relocated from Georgia, while five series (“Chad,” “Legion,” “Lucifer,” “Mistresses,” and “Timeless”) relocated from Vancouver. With the two series announced today, California’s tax credit program has welcomed a total of 25 relocating TV series since 2015 (see “Relocating TV Series” list below).

“The producers of ‘Promised Land’ are thrilled to be bringing our show home to California,” said Executive Producer/Showrunner Matt Lopez. “For over a hundred years, the Golden State has been the ‘promised land’ for content creators in the film and television industries. It is an honor and a privilege to tell this quintessentially American story right here in California, home to the most diverse and talented crews in the world.”

For their first season in California, “Promised Land” and “Mysterious Benedict Society” are on track to generate a combined $82.5 million in “qualified” spending, which is defined as below-the-line wages to California workers and payments to in-state vendors. Overall, in-state spending will be significantly greater with the inclusion of above-the-line wages and other expenditures that do not qualify for incentives under California’s uniquely targeted tax credit program.

Based on information provided with each project’s tax credit application, the two relocating series will employ a combined 411 crew, 480 cast, and 3,856 background actors/stand-ins (the latter measured in “man-days”) over 157 filming days in California, (including 26 shoot days planned outside the Los Angeles 30-Mile Studio Zone. They will also generate post-production jobs and revenue for VFX artists, sound editors, sound mixers, musicians and other workers/vendors. Based on their qualified spending and available funding for the tax credit program, the two projects combined qualify for the full $15 million in reserved tax credit for the current allocation period under SB 144.

Other Changes Under SB 144
In addition to boosting tax credits for relocating TV series, SB 144 also allocates an additional $75 million per year (for two years) to recurring TV series, which are defined as series that were accepted previously into the tax credit program and receive a “pick-up order” for a subsequent season of production. Total annual funding for recurring TV projects is part of a broader category that also includes new TV series, pilots and mini-series, so it varies each year depending on which series receive pick-up orders.

The third and final element of SB 144 creates a new and separate $150 million tax credit program targeted specifically at new soundstage development and workforce diversity. Regulations to administer this new program are currently being developed by the California Film Commission.

SB 144 was authored by state Sen. Anthony Portantino (D-La Cañada Flintridge) and passed overwhelmingly with bipartisan support in the state Assembly and Senate.

Tax Credit Application/Allocation Periods
The latest application period for TV projects was held September 20 -27. Due to the tax credit program’s success with ongoing TV projects, the allocation round was open only to new relocating series and recurring series accepted during previous rounds (see “Ongoing TV Series – Various Stages of Production” list below). In addition to the two relocating series announced today, the tax credit program currently has 22 recurring (legacy) series in various stages of production. The current list of projects eligible for tax credits is subject to change, as projects may withdraw from the program. To date, a total of 158 television projects – including new TV series, relocating TV series, pilots, MOWs and miniseries – have been selected for tax credits since 2015.

The next tax credit application period for TV projects will be March 7-14, 2022. The next application period for feature films will be January 24 – 31, 2022.

About California’s Film and Television Tax Credit Program
In 2014, the California legislature passed a bill that more than tripled the size of the state’s film and television production incentive, from $100 million to $330 million annually. Aimed at retaining and attracting production jobs and economic activity across the state, the California Film and TV Tax Credit.

Program 2.0 also extended eligibility to include a range of project types (big-budget feature films, TV pilots and 1-hr. TV series for any distribution outlet) that were excluded from the state’s first-generation tax credit program. Program 2.0 also introduced a “jobs ratio” ranking system to select projects based on “qualified” spending (e.g., wages paid to below-the-line workers and payments made to in-state vendors). To spur production statewide, an additional five percent tax credit was made available to non-independent projects that shoot outside the Los Angeles 30-Mile Studio Zone or that have qualified expenditures for visual effects or music scoring/track recording. The five-year Program 2.0 went into effect on July 1, 2015 and wrapped its fifth and final fiscal year (2019/20) on June 30, 2020.

The third generation of the California Film and TV Tax Credit Program (dubbed “Program 3.0”) was launched on July 1, 2020. New provisions include a pilot skills training program to help individuals from underserved communities gain access to career opportunities. Program 3.0 also adds provisions requiring projects to have a written policy for addressing unlawful harassment and enhanced reporting of above and below-the-line cast and crew employment diversity data.

More information about California’s Film and Television Tax Credit Program 3.0, including application procedures, eligibility, and guidelines, can be found here.

How Projects are Selected and Awarded Tax Credits Under Program 3.0
Projects approved for California tax credits are selected based on their jobs ratio score, which ranks each project by wages to below-the-line workers, qualified spending for vendors, equipment, etc., and other criteria. The top 200% ranked projects in each round (i.e., those that would qualify if double the amount of funding was available for the current allocation round) are evaluated, and those with the highest-ranked jobs ratio scores receive a tax credit reservation. Those not selected are placed on the waiting list. The tax credit program allocates funding in “buckets” for different production categories, including non-independent films, independent films, TV projects and relocating TV series. This allocation system enables applicants to compete for credits directly against comparable projects. As has been the case since the state launched its first-generation tax credit program in 2009, the California Film Commission awards tax credits only after each selected project: 1) completes post-production, 2) verifies that in-state jobs were created and 3) provides all required documentation, including audited cost reports.

About the California Film Commission
The California Film Commission enhances California’s status as the leader in motion picture, television and commercial production. It supports productions of all sizes/budgets and focuses on activities that stimulate and preserve production jobs, spending and tax revenues in California. Services include administration of the state’s Film & Television Tax Credit Program, permits for filming at state-owned properties, an extensive digital location library, location assistance and a range of other production-related resources and assistance. More information is available at film.ca.gov.

SEE CHARTS BELOW

Relocating TV Series

California Film and TV Tax Credit Program

Ongoing TV Series – Various Stages of Production

NOTES

1. The above list will likely be revised as applicants may withdraw from the program.
2. Credit allocation will be issued to recurring TV series if / when they provide pick up orders for additional episodes or new seasons.
3. “Recurring Series” is defined as a TV Series or Relocating TV Series (in its second or subsequent season in California) that has received a previous allocation of tax credits.
4. “Relocating TV Series” is a TV Series that filmed its most recent principal photography outside California.
5. * TV Projects that were initially accepted as a Relocating TV Series.

Erik Deutsch
ExcelPR Group (for the California Film Commission)
(323) 851-2455 direct
Email Erik, HERE

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