CALIFORNIA FILM & TELEVISION INCENTIVE PROGRAM
20, 2009, Governor Arnold Schwarzenegger signed legislation
creating tax credits for film and television productions as
part of an economic stimulus provision in the new state budget.
The California Film Commission is currently developing program
guidelines and application procedures. Applications will be
available on June 1, 2009. Applications will be accepted on
a first come, first served basis beginning on July 1, 2009.
the Tax Credit Works
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.
much was allocated to the program?
annually beginning fiscal year 2009/2010 through fiscal year
$10 million of the annual funding shall be set aside for independent
Any unused funds carryover to the next fiscal year
How are the funds allocated?
Tax Credits will be allocated on a first-come, first-served
basis, as long as funds are available within each fiscal year.
On each day that applications are received, they will be selected
at random via a daily lottery.
Each approved project will receive a credit allocation “reservation”
pending the project’s continued eligibility and final documentation.
The final credit allocation will be the lesser of: 1) the estimated
reservation amount or 2) an amount based on final qualified
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 minimum - $75 million maximum production
Movies of the week or miniseries ($500,000 minimum production
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 publicly traded companies do not own more than 25% of the
A "qualified motion picture" must also meet the following
75% test (production days or total production budget) in California
Application must be submitted at least 30 days prior to principal
Once application is approved, principal photography must begin
within 180 days and post production must be completed within
What expenditures qualify?
"Qualified expenditures" are amounts paid or incurred
for the purchase or lease of tangible personal property and
qualified wages for services performed in California.
following costs are not qualified expenditures:
incurred prior to application approval will not qualify for
Wages paid to writers, directors, music directors, music composers,
music supervisors, producers and performers, other than background
actors with no scripted lines.
Expenses, including wages, related to new use, reuse, clip use,
licensing, secondary markets, residual compensation or the creation
of any ancillary produced including but not limited to, a soundtrack
album, toy, game, trailer or teaser.
Expenses related to acquisition, development, turnaround or
any rights thereto; financing, overhead, marketing, promotion,
or distribution of a qualified motion picture.
State and Federal Income taxes.
Audit expenses; Completion bond.
What types of productions are not eligible for the incentive
Commercials; music videos; TV pilots; news programs; current
events or public affairs programs; talk shows; game shows; sporting
events; ½ hour (airtime) episodic TV shows; awards shows;
productions that solicit funds; reality programs; student films;
industrial films; clip based programming where more than 50%
of content is comprised of licensed footage; documentaries;
variety programs; daytime dramas; strip shows; pornography.
The California Film Commission is developing application procedures.
Once established, applications will be accepted on a first come
first served basis beginning on July 1, 2009 as long as funds
are available within each fiscal year.
The open application period will be announced by the CFC prior
to each new fiscal year for the duration of the program.
Applications will be accepted on a first come first served basis.
This process will be run as a daily lottery each business day.
Applications must be submitted at least thirty (30) calendar
days prior to the start of principal photography.
Applications that meet program criteria will be accepted and
credits will be assigned (reserved) until the annual allocation
Within 10 business days, the CFC will notify the applicant of
accepted or rejected status.
If the application meets the criteria and is approved, the production
must begin principal photography no later than 180 days from
approval date which is the date the allocation reservation letter
is issued. (If the production does not begin filming prior to
the 180 day deadline, the reservation of credits will be forfeited
and the applicant will be placed back in the queue. There will
be no guarantee that additional credits will be available once
placed in the queue.)
Once a television series has been approved and accepted into
the program, that series will be placed at the top of the queue
for lottery numbering (based on order received) for each successive
year in the life of that series whenever credits are assigned
within a fiscal year.
Once an application is accepted, the primary producer, UPM and
production accountant or other appropriate personnel will be
required to attend an orientation meeting with the CFC.