Section 5550 - [Operative 4/1/2025] Definitions(a)(1) "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.(2) "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)(1) "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.(2) "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.(3) "Cast member" means any contract player reflected as such on the production report and includes speaking roles, on-camera stunt players, pilots, puppeteers, and any dancers, singers, and musicians who are not on an extras voucher.(4) "Certified ancillary building" means an ancillary building that has been certified as part of a certified studio construction project by the CFC under the California Soundstage Filming Tax Credit Program Phase A, pursuant to sections 17053.98(k) and 23698(k) of the Revenue and Taxation Code and in accordance with the conditions specified in section 5532 and section 5538 of article 4 of this chapter.(5) "Certified soundstage" means a soundstage that has been certified by the CFC under the California Soundstage Filming Tax Credit Program Phase A, pursuant to sections 17053.98(k) and 23698(k) of the Revenue and Taxation Code and in accordance with the conditions specified in section 5532 and section 5538 of article 4 of this chapter.(6) "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.(7) "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.(d)(1) "Diversity, equity, inclusion, and accessibility" (DEIA) means a commitment to providing equitable access to opportunities for people with varying racial, ethnic, and gender identities, disabilities, sexual orientations, age, religions, and socioeconomic statuses in an environment that is reasonably accessible to all whereby all are welcomed and respected.(2) "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.(e)(1) "Equity education" means, for purposes of the diversity, equity, inclusion, and accessibility provisions specified in sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, learning about the historical and contemporary experiences of underrepresented communities and people, existing civil rights and discrimination laws, and setting achievable goals for ensuring diversity, equity, inclusion, and accessibility for everyone on production.(f)(1) "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.(2) "Final safety evaluation report" means the mandatory report prepared in accordance with section 9152(h) of the Labor Code by the safety advisor as part of the Safety on Productions Pilot Program established pursuant to section 9152 of the Labor Code.(3) "Force Majeure" means an event or series of events, which are not under the control of the qualified taxpayer, 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, public health emergency, armed conflict, terrorist activities, or government sanction.(g)(1) "Good-faith effort" means, for purposes of the diversity, equity, inclusion, and accessibility provisions specified in sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, proactive, intentional, diligent, and impactful actions taken for purposes of broadening and maintaining access to motion picture industry jobs and toward diverse, equitable, inclusive, and accessible productions that strive to have a workforce which is broadly reflective of California's population in terms of, but not limited to, race, ethnicity, gender, and disability status.(h)(1) "Hiatus" means a break or interruption in the continuity of work that may be implemented after at minimum one (1) day of principal photography, subject to the requirements in section 5554(a)(2) of this article, for up to one hundred twenty (120) calendar days. (A) Once principal photography has resumed, a project is not required to request another hiatus for a subsequent break or interruption.(B) Implementing a hiatus does not impact the thirty (30) month timeframe for completion of the final element required pursuant to section 5555(c) of this article.(i)(1) "Inclusive hiring" means, for purposes of the diversity, equity, inclusion, and accessibility provisions specified in sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, minimizing bias during the hiring process, valuing diverse perspectives, and implementing an equitable recruiting process.(2) "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.(3) "Industry capacity building" means, for purposes of the diversity, equity, inclusion, and accessibility provisions specified in sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, helping to increase an inclusive and qualified workforce and an inclusive and qualified vendor and supplier base in all areas that contribute to motion picture production in California.(j)(1) "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 17053.98.1(b)(8) and 23698.1(b)(8) and section 5553.1 of this article.(l)(1) "Limited series" shall have the same meaning as "miniseries," as defined in section 5550(m)(1) of this section, and the terms may be used interchangeably for purposes of the California Film and Television Tax Credit Program 4.0.(2) "Local Hire Labor" means 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.(3) "Logline" means a short summary of the content of a motion picture project.(m)(1) "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.(n)(1) "Non-proprietary document format" means a document format which the CFC can access and open without specialized software requiring purchase, without subscriptions, or other access keys.(o)(1) "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.(2) "Once-certified soundstage" means a soundstage, as defined in section 5550(c)(5) of this article, which was originally part of a studio construction project certified pursuant to sections 17053.98(k) and 23698(k) of the Revenue and Taxation Code as part of the California Soundstage Filming Tax Credit Program, for which the active period of certification of five (5) years has expired.(3) "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."(p)(1) "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.(2) "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.(3) "Picture editing and postproduction sound labor and services" means labor and services related to the process of assembling and winnowing the filmed material into its final form, from the raw dailies of principal photography through inclusion of visual effects, optical effects and image color correction, to delivery of the final element of the completed motion picture project, and to the process of compiling, re-recording, and mixing all of the elements that go into making the sound of the completed motion picture project, including adding music, sound effects, foley, dialogue, re-recorded dialogue, background looping, and the final mix of those elements.(4) "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).(5) "Preproduction start date" means the first day of work on a project for either the unit production manager or the production designer, whichever occurs first.(6) "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. (A) "Principal photography outside the Los Angeles Zone" means that, at minimum, the first scene of the day is filmed outside the Los Angeles Zone.(7) "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.(8) "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.(q)(1) "Qualified period" means the period that begins at the date of issuance of a qualified motion picture project's CAL, as defined in section 5550(c)(6) of this article, and ends thirty (30) calendar days after the creation of the final element, if that date falls within the thirty (30) month completion timeframe set forth in sections 17053.98.1(b)(19)(B)(ii) and 23698.1(b)(19)(B)(ii) of the Revenue and Taxation Code and section 5555(c) of this article.(r)(1) "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.(2) "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, as provided in section XII.6. of Form AUP (January 1, 2025), hereby incorporated by reference.(3) "Recurring television series" means any television series, relocating television series, or any new television series based on a pilot for a new television series that was approved and issued a CAL in a previous allocation period under the California Film and Television Tax Credit Program 1.0, 2.0, 3.0, or 4.0, or the California Soundstage Filming Tax Credit Program.(4) "Relocating television series" has the same meaning as "television series that relocated to California;" as defined in section 5550(t)(4) of this article for purposes of the California Film and Television Program 4.0, and the terms may be used interchangeably and shall be understood to have the same meaning.(s)(1) "Safety advisor" means, for purposes of the California Film and Television Program 4.0, an individual who fulfills the criteria of section 9151(k) of the Labor Code, including successful completion of the training course that has been implemented by the Industry-Wide Labor-Management Safety Committee pursuant to paragraph 9151(k)(2) of the Labor Code, and who prepares and submits the final safety evaluation report.(2) "Scripted series" means a fictional episodic television series based upon scripted materials.(3) "Scoring musician" means an instrumental musician, a vocalist, a music arranger, an orchestrator, a Musical Instrument Digital Interface (MIDI) transcriber, a music copyist, a music librarian, a conductor (except a conductor that is also the composer), and a musician or a choral contractor employed solely for the purpose of recording music for a qualified motion picture.(4) "Soundstage applicant" means an applicant, as defined in this section, that films its project on a soundstage or soundstages certified or once certified by the California Film Commission pursuant to sections 17053.98(k) and 23698(k) of the Revenue and Taxation Code and fulfilling specific requirements of those sections to receive the one hundred thirty-three percent (133%) jobs ratio advantage specified in section 5553.1(a)(2) of this article.(5) "Soundstage wages" means wages for production services performed within the production period, as defined in sections 17053.98.1(b)(15) and 23698.1(b)(15) of the Revenue and Taxation Code, on a certified soundstage or certified ancillary building and in alignment with section 5530 (l)(1)(A) of article 4 of this chapter. Wages related to maintenance of the certified soundstage, and wages incurred for services performed at locations or facilities that are not a certified soundstage or certified ancillary building shall not be included for the purpose of satisfying the criteria in sections 17053.98(k)(2)(B)(ii) and 23698(k)(2)(B)(ii).(6) "Stage shooting day" means a principal photography day, as defined in section 5550(p)(6) of this article, during which an applicant utilizes its certified soundstage(s), or other soundstage(s) for six hours or more. For purposes of qualifying as a stage shooting day, time spent filming on the backlot or similar contiguous area immediately adjacent to the certified soundstage(s) or other soundstage(s) shall qualify.(7) "Supplemental television season" means a backorder of episodes related to a season that is already in production.(8) "Supplier diversity" means, for purposes of the diversity, equity, inclusion, and accessibility provisions specified in sections 17053.98.1(g)(3)(D) and 23698.1(g)(3)(D) of the Revenue and Taxation Code, contracting with vendors, including but not limited to catering companies, accounting firms, equipment rentals, and postproduction houses, owned and operated by individuals from socially and economically underrepresented groups to support production.(t)(1) "Television project" means pilots for new television series, new television series, miniseries/limited series, a relocating television series, and recurring television series.(2) "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.(A) A supplemental television season may consist of fewer than six (6) episodes.(3) "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.(4) "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 seventy-five percent (75%) 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.(v)(1) "Visual effects" (VFX) means the digital and/or in-camera creation, alteration, or enhancement of images. Visual Effects includes, but is not limited to, clean-up, wire removals, matte paintings, animation, set extensions, computer-generated objects, characters and environments, digital FX simulations, compositing (combining two or more elements in a final image), motion capture, facial capture, world capture (locations, set scanning) and visualizations (previz, techviz, postviz). It also includes the digital creation, clean-up, alteration or enhancement of materials for and resulting from shooting in a virtual production volume. "Visual effects" does not include fully animated projects, whether created by traditional or digital means.Cal. Code Regs. Tit. 10, § 5550
Note: Authority cited: Sections 17053.98.1(e) and 23698.1(e), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17053.98(k), 17053.98.1(a), 17053.98.1(b), 17053.98.1(g), 17053.98.1(h), 17053.98.1(i), 23698(k), 23698.1(a), 23698.1(b), 23698.1(g), 23698.1(h) and 23698.1(i), Revenue and Taxation Code; Sections 9151(k) and 9152(h), Labor Code; and Section 14998.1, Government Code.
1. New article 5 (sections 5550-5556) and section filed 12-17-2024; operative 4/1/2025 (Register 2024, No. 51).