California Code of Regulations › Title 10 - Investment › Chapter 7.75 - California Film Commission › Article 4 - California Soundstage Filming Tax Credit Program › Section 5539 - Tax Credit Allocation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The
				California Soundstage Filming Tax Credit Program allows for a qualified
				taxpayer that meets all eligibility criteria and submission requirements under
				this Program to receive a credit against the "net tax," as defined in Revenue
				and Taxation Code section
				17039,
				or the "tax," as defined in Revenue and Taxation Code section
				23036.
(b) The tax credit awarded under this Program
				is allowed for taxable years beginning on or after January 1, 2022, and before
				January 1, 2032, and the total amount of credits that may be allocated under
				this Program is one hundred fifty million dollars ($150,000,000).
(c) Once approximately seventy-five percent
				(75%) of the Program's available credit funding has been reserved, the CFC will
				issue a production alert and post on its website that the Program is nearing
				reservation of its full funding and will cease to accept applications for Phase
				A on the date that is 30 business days after issuance of the production alert
				and website post (the "designated date"). Phase A applications will only be
				accepted after the designated date for soundstage construction or renovation
				projects that were issued a foundation permit or a structural building permit
				as per Revenue and Taxation Code sections
				17053.98(k)(2)(A)(iv)
				and
				23698(k)(2)(A)(iv)
				and through the designated date. No other Phase A applications will be accepted
				unless and until the Program receives additional funding.
(d) The tax credit awarded under this
				Program, subject to allocation by the CFC, will be in an amount equal to 20
				percent or 25 percent, whichever is the applicable credit percentage described
				in Revenue and Taxation Code sections
				17053.98(a)(4)
				and
				23698(a)(4)
				of the qualified expenditures paid or incurred during the taxable year by a
				qualified motion picture produced in the state at a certified studio
				construction project. The tax credit may also be increased by Revenue and
				Taxation Code sections
				17053.98(k)(3)
				and
				23698(k)(3),
				regarding the credit percentage increase for diversity goals
				achievement.
(e) Notwithstanding
				subdivision (d), no certified motion picture will be allocated more than the
				cap sum specified in sections
				17053.98(k)(8)(B)
				and
				23698(k)(8)(B)
				of the Revenue and Taxation Code. Recurring television series that previously
				received an allocation under this Program for a season shall not be allocated
				more than the cap sum specified in sections
				17053.98(k)(8)(B)
				and
				23698(k)(8)(B)
				of the Revenue and Taxation Code for subsequent seasons that qualify for this
				Program.
(f) Motion pictures that
				have previously received a tax credit allocation under Revenue and Taxation
				Code sections
				17053.98(a)-(j)
				and
				23698(a)-(j),
				for the fiscal year, are not eligible to receive an allocation under this
				Program.
(g) If a tax credit
				allowed by this Program exceeds the taxpayer's computed tax liability, the
				excess credit may be carried over to reduce the "net tax" or "tax," as
				applicable, in the following taxable year, and succeeding eight taxable years,
				if necessary, until the credit has been exhausted.
(h) The relationship between the California
				Soundstage Filming Tax Credit Program and the California Film and Television
				Tax Credit Program 3.0 and its successor programs is defined and shall occur as
				follows:
(1) A qualified motion picture,
				other than a recurring television series, that satisfies the criteria of the
				California Soundstage Filming Tax Credit Program but that does not receive a
				credit allocation under this program because the total amount of credits has
				been allocated or because the period of certification for the soundstage or
				soundstages where the project is filming has expired, may apply for a credit
				allocation under the California Film and Television Tax Credit Program 3.0 or
				its successor programs subject to a jobs ratio enhancement of 133 percent,
				pursuant to sections
				17053.98(g)(2)(D)(iv)(II)
				and
				23698(g)(2)(D)(iv)(II)
				of the Revenue and Taxation Code.
(2) A recurring television series that
				satisfies the criteria of the California Soundstage Filming Tax Credit program
				but is no longer eligible for a credit allocation under this program because
				the total amount of credits has been allocated or because the period of
				certification for the soundstage or soundstages where the project is filming
				has expired shall receive a credit allocation under the California Film and
				Television Tax Credit Program 3.0 or its successor programs, pursuant to
				sections
				17053.98(g)(2)(D)(v)
				and
				23698(g)(2)(D)(v)
				of the Revenue and Taxation Code.
(3) A qualified motion picture may fulfill
				the ownership or tenant requirement of sections 17053.98(k)(2)(B)(iii) or
				23698(k)(2)(B)(iii) of the Revenue and Taxation Code with a certified studio
				construction project for which the period of certification has expired for
				purposes of being eligible to apply for or receive an allocation of tax credits
				under the California Film and Television Tax Credit Program 3.0 or its
				successor programs, as described in paragraphs (1) and (2) above, when a reason
				for ineligibility under the California Soundstage Filming Tax Credit Program is
				that the period of certification for the certified studio construction project
				has expired.