Section 5551 - [Operative 4/1/2025] Program Eligibility(a) In order for an applicant to be eligible to apply for an allocation of tax credits under the California Film and Television Tax Credit Program 4.0, the applicant must ensure that the qualified motion picture referenced in the application complies with the provisions of sections 17053.98.1(b)(19) and 23698.1(b)(19) of the Revenue and Taxation Code, including but not limited to: (1)(A) Filming at least seventy-five percent (75%) of principal photography days wholly in California; or,(B) Incurring at least seventy-five percent (75%) of the total production budget in California.(2) Not commencing principal photography in California prior to issuance of a Credit Allocation Letter (CAL), Form D4 (January 1, 2025), hereby incorporated by reference.(b)(1) An applicant may apply for tax credit allocation under the California Film and Television Tax Credit Program 4.0 with a qualified motion picture project in one of the following categories: (A) Non-independent feature film(B) Independent film with a qualified expenditure budget over ten million dollars ($10,000,000).(C) Independent film with a qualified expenditure budget of ten million dollars ($10,000,000) or less.(E) New television series.(F) Recurring television series.(G) Relocating television series.(H) Miniseries/limited series.(2) Pursuant to sections 17053.98(k)(8)(D), 17053.98(g)(2)(D)(iv)(II), 17053.98.1(g)(2)(D)(iii)(II), 23698(k)(8)(D), 23698(g)(2)(D)(iv)(II), and 23698.1(g)(2)(D)(iii)(II) of the Revenue and Taxation Code, an applicant may qualify for the Program by filming a qualified motion picture project on a soundstage or soundstages certified by the California Film Commission (CFC) as part of a Certified Studio Construction Project in accordance with Revenue and Taxation Code sections 17053.98(k) and 23698(k), subject to a jobs ratio enhancement of one hundred thirty-three percent (133%).(A) A qualified motion picture project utilizing the jobs ratio enhancement must fulfill all applicable California Film and Television Tax Credit Program 4.0 requirements as well as all applicable California Soundstage Filming Tax Credit Program requirements, as specified in sections 5553(j)(5)(D), 5553(j)(6)(E), 5553(j)(6)(F), and 5553(j)(10)(C) of this article.(B) The category designation for a qualified motion picture project utilizing the jobs ratio enhancement shall be the same as in subparagraphs (A) through (H) of paragraph (1) above, as applicable, with "Soundstage" added as a suffix.(c) To qualify as a non-independent feature film, the motion picture project shall have a running time of at least seventy-five (75) minutes and a minimum budget of one million dollars ($1,000,000).(d) To qualify as an independent film, the motion picture project shall have a running time of at least seventy-five (75) minutes and a minimum budget of one million dollars ($1,000,000), and must be 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.(e) To qualify as a pilot for a new television series, the pilot episode shall have a running time longer than forty (40) minutes, exclusive of commercials, shall be produced in California with a minimum budget of one million dollars ($1,000,000), and shall be the initial episode in a proposed television series.(f) To qualify as a new television series, the television series shall produce episodes with a running time longer than forty (40) minutes each, exclusive of commercials, and with a minimum production budget of one million dollars ($1,000,000) per episode.(g) To qualify as a recurring television series, the television series must be an eligible qualified motion picture project that is a subsequent season of a new television series or a relocating television series, or a season of a television series based on a pilot, initially allocated tax credits pursuant to sections 17053.85, 17053.95, 17053.98, 17053.98.1, 23685, 23695, 23698, or 23698.1 of the Revenue and Taxation Code.(h) To qualify as a relocating television series, the television series shall meet the following criteria: (1) Provide a certification from the applicant that the tax credit provided pursuant to this section is the primary reason for relocating to California.(2) Produce episodes of any length, filmed its most recent season outside of California, and have a minimum production budget of one million dollars ($1,000,000) per episode.(3) At least seventy-five percent (75%) of principal photography days of its most recent season have been filmed outside of California.(i) To qualify as a miniseries/limited series, the project shall consist of two or more episodes each longer than forty (40) minutes of running time, exclusive of commercials, with a minimum production budget of one million dollars ($1,000,000) per episode and shall be based on a single theme or storyline that is resolved within those episodes.(j) For purposes of tax credit allocation and program requirements, any category of qualified motion picture project that is episodic television (including a pilot or a miniseries/limited series) shall be considered a non-independent project, regardless of whether the project is produced by a company that is publicly traded or owned, directly or indirectly, by a publicly traded company.(k)(1) An animated production is not considered a qualified motion picture and shall not be eligible for a tax credit. Animated production means content created that does not utilize or incorporate live action footage but creates a motion picture consisting principally of computer generated or hand painted images. An animated production does not engage in principal photography and therefore does not meet the conditions for eligibility set forth in sections 17053.98.1(b)(14) and 23698.1(b)(14) of the Revenue and Taxation Code.(2) Revenue and Taxation Code sections 17053.98.1(b)(19)(D) and 23698.1(b)(19)(D) contain a listing of other project types, content, and production circumstances ineligible for tax credit allocation under the California Film and Television Tax Credit Program 4.0.Cal. Code Regs. Tit. 10, § 5551
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(c), 17053.98.1(g), 17053.98.1(i), 23698(k), 23698.1(a), 23698.1(b), 23698.1(c), 23698.1(g) and 23698.1(i), Revenue and Taxation Code; and Section 14998.1, Government Code.
1. New section filed 12-17-2024; operative 4/1/2025 (Register 2024, No. 51).