Section 5553.1 - [Operative 4/1/2025] Jobs Ratio and Bonus Points(a)(1) The base jobs ratio of a project shall be determined by dividing the qualified wages specified in subparagraph (A) below by the estimated jobs ratio tax credit amount calculated pursuant to subparagraph (B) below.(A) For the purposes of the jobs ratio calculation, qualified wages shall include: 1. Qualified wages which are directly paid by the applicant or its payroll service; plus2. Thirty-five percent (35%) of all qualified non-wage expenditures, including contracted services in which the qualified wages are not directly paid by the applicant, but by the vendor. (i) For purposes of jobs ratio calculation only, qualified VFX expenditures shall be apportioned as seventy percent (70%) qualified wage and thirty percent (30%) qualified non-wage for VFX work performed by third party California vendors.(B) For purposes of the jobs ratio calculation, the estimated jobs ratio tax credit amount shall be calculated as follows:1. Add the sum of total budgeted qualified wages as stated pursuant to section 5553(j)(9)(A) of this article to the sum of total budgeted qualified non-wage expenditures as stated pursuant to section 5553(j)(9)(B) of this article.2. Multiply the combined sum of clause 1. above:(i) By 0.2 for a non-independent project except a relocating television series.(ii) By 0.25 for an independent film or a relocating television series.3. The base jobs ratio shall not include any increase to the tax credit based on an uplift or from expenditures relating to a contingency or completion bond.(2) For a soundstage applicant, the base jobs ratio calculated pursuant to paragraph (1) shall be multiplied by one hundred thirty-three percent (133%), pursuant to sections 17053.98.1(g)(2)(D)(iii)(II) and 23698.1(g)(2)(D)(iii)(II) of the Revenue and Taxation Code. (A) The base jobs ratio multiplied by one hundred thirty-three percent (133%) in accordance with paragraph (2) above shall function as base jobs ratio for purposes of calculating a bonus point increase for a soundstage applicant.(b) The jobs ratio, as defined in section 5550(j)(1), may be increased by up to twenty-five percent (25%) if the qualified motion picture demonstrates an increase in economic activity in the state. This activity is measured and assigned bonus points based on the following:(1) One (1) to seven (7) bonus points based on the visual effects expenditures per qualified motion picture project category. Excludes independent films with qualified expenditure budgets of ten million dollars ($10,000,000) or less. The bonus point range is assigned in paragraph (1) of subdivision (c) below.(2) One (1) to ten (10) bonus points based on the percentage of principal photography days outside the Los Angeles Zone, as defined in section 5550(p)(6)(A) of this article, in relation to the qualified motion picture's total principal photography days in the state. The bonus point range is assigned in paragraph (2) of subdivision (c) below.(3) One (1) to five (5) bonus points based on the wages paid to scoring musicians, as defined in section 5550(s)(3) of this article. Excludes independent films with qualified expenditure budgets of ten million dollars ($10,000,000) or less. The bonus point range is assigned in paragraph (3) of subdivision (c) below.(c) The CFC has established the bonus point ranges as follows:(1) Bonus points for VFX as provided in paragraph (b)(1) above apply as follows: (A) For non-independent feature film productions:1. One (1) bonus point for California VFX spend of two million dollars ($2,000,000) or more.2. Two (2) bonus points for California VFX spend of three million dollars ($3,000,000) or more.3. Three (3) bonus points for California VFX spend of five million dollars ($5,000,000) or more.4. Four (4) bonus points for California VFX spend of seven million five hundred thousand dollars ($7,500,000) or more.5. Five (5) bonus points for California VFX spend of ten million dollars ($10,000,000) or more.6. Six (6) bonus points for California VFX spend of fifteen million dollars ($15,000,000) or more.7. Seven (7) bonus points for California VFX spend of twenty million dollars ($20,000,000) or more.(B) For television series: 1. One (1) bonus point for California VFX spend of one hundred thousand dollars ($100,000) or more.2. Two (2) bonus points for California VFX spend of three hundred fifty thousand dollars ($350,000) or more.3. Three (3) bonus points for California VFX spend of five hundred thousand dollars ($500,000) or more.4. Four (4) bonus points for California VFX spend of one million dollars ($1,000,000) or more.5. Five (5) bonus points for California VFX spend of two million dollars ($2,000,000) or more.6. Six (6) bonus points for California VFX spend of three million five hundred thousand dollars ($3,500,000) or more.7. Seven (7) bonus points for California VFX spend of five million dollars ($5,000,000) or more.(C) For independent films with a qualified expenditure budget over ten million dollars ($10,000,000): 1. One (1) bonus point for California VFX spend of one hundred thousand dollars ($100,000) or more.2. Two (2) bonus points for California VFX spend of three hundred fifty thousand dollars ($350,000) or more.3. Three (3) bonus points for California VFX spend of five hundred thousand dollars ($500,000) or more.4. Four (4) bonus points for California VFX spend of one million dollars ($1,000,000) or more.5. Five (5) bonus points for California VFX spend of two million dollars ($2,000,000) or more.6. Six (6) bonus points for California VFX spend of three million dollars ($3,000,000) or more.7. Seven (7) bonus points for California VFX spend of four million dollars ($4,000,000) or more.(2) Bonus points for percentage of principal photography days outside the Los Angeles zone as provided in paragraph (b)(2) above shall be determined by applying percentage points on a linear proportionate scale. Starting with ten percent (10%) of principal photography days, the applicants will receive one point for every ten percent (10%) increase of out of zone principal photography days in the following manner:(A) One (1) bonus point for ten percent (10%) or more but less than twenty percent (20%) of out of zone principal photography days;(B) Two (2) bonus points for twenty percent (20%) or more but less than thirty percent (30%) of out of zone principal photography days;(C) Continuing with an increase of one bonus point per ten percent (10%) increase, until the maximum cap of ten (10) bonus points is received.(D) The percentages are determined by dividing the out of zone principal photography days by the total principal photography days, as described in section 5553(j)(5)(A)4. of this article.(3) Bonus points for California music scoring and track recording labor (music wages) as provided in paragraph (b)(3) apply as follows:(A) For non-independent feature film productions:1. One (1) bonus point for California music wages of one hundred thousand dollars ($100,000) or more.2. Two (2) bonus points for California music wages of two hundred thousand dollars ($200,000) or more.3. Three (3) bonus points for California music wages of four hundred thousand dollars ($400,000) or more.4. Four (4) bonus points for California music wages of six hundred thousand dollars ($600,000) or more.5. Five (5) bonus points for California music wages of eight hundred thousand dollars ($800,000) or more.(B) For television series:1. One (1) bonus point for California music wages of fifty thousand dollars ($50,000) or more.2. Two (2) bonus points for California music wages of one hundred fifty thousand dollars ($150,000) or more.3. Three (3) bonus points for California music wages of two hundred fifty thousand dollars ($250,000) or more.4. Four (4) bonus points for California music wages of six hundred thousand dollars ($600,000) or more.5. Five (5) bonus points for California music wages of eight hundred thousand dollars ($800,000) or more.(C) For independent films with a qualified expenditure budget over ten million dollars ($10,000,000): 1. One (1) bonus point for California music wages of thirty thousand dollars ($30,000) or more.2. Two (2) bonus points for California music wages of sixty thousand dollars ($60,000) or more.3. Three (3) bonus points for California music wages of ninety thousand dollars ($90,000) or more.4. Four (4) bonus points for California music wages of one hundred twenty thousand dollars ($120,000) or more.5. Five (5) bonus points for California music wages of one hundred fifty thousand dollars ($150,000) or more.(d) The adjusted jobs ratio calculated pursuant to paragraph (1) below shall be utilized to rank qualified motion pictures within the categories non-independent feature, independent film with a qualified expenditure budget of ten million dollars ($10,000,000) or less, independent film with a qualified expenditure budget over ten million dollars ($10,000,000), recurring television series, relocating television series, and new television series/miniseries/limited series/pilot during the application process, pursuant to section 5553(k) of this article.(1) The adjusted jobs ratio of a project shall be determined by multiplying the base jobs ratio, or the soundstage base jobs ratio for a soundstage applicant, by (total bonus points x 1/100) + 1.(e) Based on the information provided by the applicant, the jobs ratio and adjusted jobs ratio shall be automatically calculated in accordance with this section in the online application portal accessible on the website www.film.ca.gov or, if necessary prior to portal completion or due to technical issues, in Excel or equivalent non-proprietary document format, provided by the CFC.(f) If information submitted by an applicant is overstated on the application compared to the final jobs ratio verified in the AUP (January 1, 2025), hereby incorporated by reference, the applicant will be penalized as provided in Revenue and Taxation Code sections 17053.98.1(d)(2) and 23698.1(d)(2). (1) If the overstatement exceeds twenty percent (20%) the applicant shall submit documentation identifying the members of its controlled group to enable the CFC to implement the provisions of sections 17053.98.1(d)(2)(B)(ii) and 23698.1(d)(2)(B)(ii) of the Revenue and Taxation Code.Cal. Code Regs. Tit. 10, § 5553.1
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(b), 17053.98.1(d), 17053.98.1(g), 23698(k), 23698.1(b), 23698.1(d) and 23698.1(g), 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).