California Code of Regulations › Title 10 - Investment › Chapter 7.75 - California Film Commission › Article 2 - California Film and Television Job Retention and Promotion Act California Film and Television Tax Credit Program 2.0 › Section 5512 - Tax Credit Allocation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The amount of tax credit allocated shall
				be based on the percentage of the qualified expenditures as provided in
				sections
				17053.95(a)
				and
				23695(a)
				of the Revenue and Taxation Code.
(b) If all tax credits have been allocated
				for any application period, qualified motion pictures shall be placed in a
				prioritized waiting list according to their project type and in the order of
				their job ratio ranking until one of the following occurs: credits become
				available that allocation period, the production elects to be removed from the
				queue, the credit is revoked, or until the allocation period ends.
(c) If the applicant is producing a series of
				feature films that will be filmed concurrently and the series of films
				continues the narrative of the original work and financing is confirmed, then
				the CFC shall have the authority to divide the allocation over multiple fiscal
				years if it is determined that the production schedule occurs over more than
				one fiscal year.
(d) For the
				purposes of this section, a five percent (5%) augmentation to the tax credit
				allocation shall be made by the CFC when any of the following conditions have
				been met:
(1) The production company pays or
				incurs qualified expenditures relating to music track recording and/or music
				scoring in California;
(2) The
				production company pays or incurs qualified expenditures relating to qualified
				visual effects work totaling a minimum of ten million dollars ($10,000,000) or
				at least seventy-five percent (75%) of total worldwide visual effects
				expenditures incurred in California;
(3) The production company pays or incurs
				qualified wages for services performed outside the Los Angeles zone during the
				applicable period relating to original photography outside the Los Angeles
				zone. The foregoing amounts shall be substantiated by documentation including
				but not limited to timesheets and payroll records as requested by the
				CFC;
(4) The production company
				purchases or leases tangible personal property outside the Los Angeles zone
				during the applicable period and the personal property is used or consumed
				outside the Los Angeles zone. Tangible personal property must be purchased,
				rented or leased from an outside of Los Angeles vendor through an office or
				other place of business outside the Los Angeles zone. Rentals or purchases from
				a pass-through business do not qualify for the five percent (5%) augmentation.
(A) If the tangible personal property
				purchased or leased outside the Los Angeles zone was not completely used or
				consumed solely outside the Los Angeles zone, the production company shall
				apportion amounts paid or incurred for tangible personal property outside the
				Los Angeles zone during the applicable period by multiplying these non-wage
				outside the Los Angeles zone expenditures by the ratio of days of principal
				photography outside the Los Angeles zone to the total number of days of
				principal photography.
(B) If the
				tangible personal property purchased or leased outside the Los Angeles zone was
				completely used or consumed solely outside the Los Angeles zone, the production
				company may elect to substantiate that with its records. Tangible person
				property purchased or leased outside the Los Angeles zone shall be deemed to be
				completely used or consumed provided the property was of a type or nature such
				that it would have no residual material value remaining after its use or
				consumption outside the Los Angeles zone. Examples of such property include,
				but are not limited to, food and catering items, rented hotel or corporate
				housing usage, construction supplies and materials for sets, automotive or
				other fuels, security services, location and stage services, government permit
				fees, personnel services, printing, equipment rentals for the applicable period
				outside the Los Angeles Zone, transportation services, dry cleaning, and
				shipping and travel costs from within the state to and from the out of zone
				location.