California Code of Regulations › Title 10 - Investment › Chapter 7.75 - California Film Commission › Article 3 - California Film and Television Tax Credit Program 3.0 › Section 5520 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				"Applicable period" refers to production outside the Los Angeles zone, but in
				the state of California, that commences with preproduction and ends when
				original photography concludes outside the Los Angeles zone. It includes the
				time necessary to strike a remote location and return to the Los Angeles
				zone.
(b) "Applicant" is any
				person, corporation, partnership, limited partnership, limited liability
				company (LLC) or other entity that is principally engaged in the production of
				a "qualified motion picture" and that controls the film or television program
				during preproduction, production and postproduction. The applicant is the
				qualified taxpayer that upon final approval will receive the tax credit
				certificate.
(c) "California Film
				Commission" (CFC) is a state entity established and described in Government
				Code section
				14998 et
				seq. that, among other functions, facilitates and promotes motion picture and
				television production in the State of California.
(d) "California in-state Vendor" is a vendor
				or supplier which has an office or other place of business in California, and
				is registered or qualified with the California Secretary of State, or is
				required to file a return with the California Franchise Tax Board under Parts
				10 or 11 of the Revenue and Taxation Code.
(e) "Credit Allocation Letter" (CAL) is the
				document issued by the California Film Commission reserving an amount of tax
				credits to an applicant having a qualified motion picture based on an estimate
				of qualified expenditures.
(f)
				"Contracted Services" means the hiring of a third party to work or perform
				services on behalf of the applicant including, but not limited to, visual
				effect shot costs, makeup prosthetic packages, sound mixing, and creation of
				postproduction delivery items.
(g)
				"Documentary" means a film or television project dealing with factual events,
				that are photographed in actual occurrence or depicted through techniques
				including, but not limited to partial reenactment, stock footage, stills,
				animation, or stop-motion.
(h)
				"Feature Film" means a production of a film with a minimum budget of one
				million dollars ($1,000,000) that has a running time of at least seventy-five
				(75) minutes.
(i) "Force Majeure"
				means an event or series of events, which are not under the control of the
				qualified tax payer, including death, disability, disfigurement or breach by
				the motion picture director or principal cast member, an act of God, including,
				but not limited to, fire, flood, earthquake, storm, hurricane or other natural
				disaster, labor disruption, terrorist activities or government
				sanction.
(j) "Hiatus" means a
				break or interruption in the continuity of work.
(k) "Independent film" means a film with a
				running time of at least seventy-five (75) minutes with a minimum budget of one
				million dollars ($1,000,000) which is produced by a company that is not
				publicly traded and a publicly traded company does not own, directly or
				indirectly, more than twenty-five percent (25%) of the producing
				company.
(l) "Jobs Ratio" means the
				amount of qualified wages paid to qualified individuals divided by the amount
				of tax credit as further described in Revenue and Taxation Code section
				17053.98(b)(7)
				and
				23698(b)(7).
(m) "Limited series" shall be understood to
				have the same meaning as "miniseries," as defined in section
				5520(o) of this
				subdivision, and the terms may be used interchangeably for purposes of the
				California Film and Television Tax Credit Program.
(n) "Local Hire Labor" refers to qualified
				individuals who reside in California, but outside the Los Angeles zone, and who
				are working outside the Los Angeles zone during the applicable
				period.
(o) "Miniseries" means a
				motion picture based on a single theme or storyline that is resolved within the
				piece. A miniseries consists of two or more episodes each longer than 40
				minutes of running time, exclusive of commercials, with a minimum production
				budget of one million dollars ($1,000,000) per episode.
(p) "Office or other place of business" means
				real property with a physical address in California that is owned or leased by
				a vendor for the purpose of conducting business. For purposes of these
				regulations, conducting business includes maintaining a product inventory or
				otherwise creating, assembling or offering for sale the product purchased or
				leased by a motion picture production company.
(q) "Outside Los Angeles zone vendor" means a
				vendor or supplier in California which maintains an office or place of business
				outside the Los Angeles zone, and is registered or qualified with the
				California Secretary of State, or is required to file a return with the
				California Franchise Tax Board under Parts 10 or 11 of the Revenue and Taxation
				Code and employs one or more full-time employees, or is a sole proprietor
				working at the place of business outside the Los Angeles zone. Pass-through
				businesses do not qualify as an "Outside Los Angeles zone vendor."
(r) "Pass-through business" means a company
				maintaining an office or other place of business in California that primarily
				fulfills orders from a production company for products or third-party services
				from sources other than its own inventories or employees.
(s) "Pick-up order" means a contractual
				obligation from a licensee-exhibitor that a pilot or television series has been
				ordered or renewed for the production of an initial episode or episodes to be
				delivered within a specific time frame.
(t) "Pilot" means the initial episode
				produced for a proposed television series that is longer than 40 minutes of
				running time, exclusive of commercials, with a minimum production budget of one
				million dollars ($1,000,000).
(u)
				"Principal photography days" means the number of days shot by the principal
				unit with the director present and lead actors usually present. "Principal
				photography days" in California does not include the filming of primarily
				backgrounds, visual effects, action, and/or crowd scenes by the second, stunt,
				or visual effects units.
(v)
				"Producer" means any individual who receives an on-screen producer credit
				including but not limited to any of the following titles: producer,
				co-producer, line producer, executive producer, co-executive producer,
				associate producer, supervising producer, post producer, or visual effects
				producer.
(w) "Production budget"
				means the budget used by the applicant and production company and shall include
				qualified and non-qualified expenditures. Production budget shall include
				wages, goods, and services performed and incurred within and outside of
				California. It does not include costs which are not directly associated with
				the preproduction, production or postproduction of the project, such as, but
				not limited to, distribution prints and advertising, marketing, film festival
				participation, financing, or distribution costs such as DVD
				manufacturing.
(x) "Reality
				television program" means a program depicting real events and non-actors
				through actual footage which presents persons in purportedly unscripted or
				partially scripted situations.
(y)
				"Reasonable Cause" means unforeseen circumstances beyond the control of the
				applicant, including, but not limited to: an event of force majeure; the
				cancellation of a television series prior to the completion of the scheduled
				number of episodes; failure by third parties to perform; a change in essential
				talent such as the director, principal cast and the associated costs; and/or a
				change in production financing exigencies resulting in a significant reduction
				to the production budget.
(z)
				"Recurring Series" means any television series that was approved and issued a
				CAL in a previous allocation period.
(aa) "Scripted series" means a fictional
				episodic television series based upon scripted materials.
(bb) "Television Project" means pilots for
				new television series, new television series, miniseries, and recurring
				television series.
(cc) "Television
				Season" means the initial exhibition of a set of interrelated new television
				episodes lasting no less than six (6) episodes and no more than thirty (30)
				episodes within a period of twelve (12) months.
(dd) "Television Series" also known as
				"episodic television," means a regularly occurring production and may include a
				series with multiple episodes available to the public in a single viewing and
				without regard to distribution transmission.
(ee) "Television series that relocated to
				California" means a television series without regard to episode length or
				initial media exhibition, with a minimum production budget of one million
				dollars ($1,000,000) per episode, that filmed at least 75 percent of principal
				photography days in its most recent season outside of California or has filmed
				all seasons outside of California and for which the taxpayer certifies that the
				credit is the primary reason for relocating to California; also known as a
				Relocating TV series.
(ff)
				"Television series that relocated to California" in fiscal years 2021-22 and
				2022-23 means a television series without regard to episode length or initial
				media exhibition, with a minimum production budget of one million dollars
				($1,000,000) per episode that both filmed at least 75 percent of principal
				photography days for at least one episode outside of California and has not
				filmed more than 25 percent of principal photography days for any episode
				inside of California; also known as a Relocating TV series.
(gg) "Visual effects" (VFX) means the
				creation, alteration or enhancement of images that cannot be captured on a set,
				or location during live action photography and therefore is primarily
				accomplished in post-production. Visual effects research, development,
				creation, alteration, or enhancement of images may also occur in pre-production
				or principal photography. Visual effects includes, but is not limited to, matte
				paintings, animation, set extensions, computer generated objects, characters
				and environments, compositing (combining two or more elements in a final
				image), and wire removals. "Visual effects" does not include fully animated
				projects, whether created by traditional or digital means.
Note: Authority cited: Sections
					 17053.98(b),
					 17053.98(e),
					 17053.98(i),
					 23698(b),
					 23698(e) and
					 23698(i), Revenue
					 and Taxation Code; and Section
					 11152, Government Code. Reference:
					 Sections 6902.5,
					 17053.98 and
					 23698, Revenue and Taxation Code;
					 and Section
					 14998.1, Government Code.
Note: Authority cited: Sections
					 17053.98(b),
					 17053.98(e),
					 17053.98(i),
					 23698(b),
					 23698(e)
					 and
					 23698(i),
					 Revenue and Taxation Code; and Section
					 11152,
					 Government Code. Reference: Sections
					 6902.5,
					 17053.98
					 and
					 23698,
					 Revenue and Taxation Code; and Section
					 14998.1,
					 Government Code.