California’s Film & Television Tax Credit Program 2.0 is helping bring big-budget features back home while spreading production activity across the Golden State.
The latest group of 22 film projects accepted into the program includes another big-budget feature, along with 10 films currently slated to shoot at least partially outside the Los Angeles 30-Mile Zone.
The big-budget film (“Untitled Paramount Project”) would have been ineligible under the state’s first-generation tax credit program (Program 1.0), which excluded projects with budgets greater than $75 million. In contrast, Program 2.0 is open to film projects with any budget (though credits are capped to each project’s first $100 million in qualified spending). The project announced today will employ nearly 300 cast and crew members and bring more than $100 million in qualified in-state spending, including $50 million in wages to below-the-line-workers. It joins Disney’s previously announced “Wrinkle in Time” as a big-budget win for California’s Program 2.0.
The list of new tax credit projects announced today also continues Program 2.0’s trend of bringing production jobs and spending to regions across the state. This success is facilitated by the Program’s five percent “uplift” provision designed specifically to encourage such production.
Projects announced today with plans to shoot outside the 30-Mile Zone include “Ad Astra” (Lima Project Films), “Beautiful Boy” (Amazon Studios), “Blonde” (Plan B Entertainment), “Book Club” (Bookclub for Cats, LLC), “Highway One” (Placeholder Productions), “Inner City” (Inner City Productions), “Shutter Spy” (Shutter Spy Productions), “Untitled Jessica Buchanan Story” (WB Studio Enterprises), “Untitled Paramount Project” and “Untitled Universal Pictures Project.” The most recent prior list of feature films (announced by the California Film Commission on August 2, 2016) included five such out-of-zone projects.
“Thanks to the expanded tax credit program we’re now on a path to win more and more battles in the fight against runaway production,” said Amy Lemisch, executive director of the California Film Commission. “Welcoming another big-budget feature and creating jobs across the state are great news for California.”
Lemisch went on to note the good news comes on the heels of a record year for feature film production reported by FilmL.A.
Paul Audley, president of FilmL.A. commented, “The incentive is working as intended.”
The 22 tax credit projects announced today are part of the second and final feature film allocation for year-two of Program 2.0. The application period was held January 2 -13, and drew 93 applications vying for $100 million in tax credit allocation. Based on data provided with each application, the selected projects (14 from non-independent production companies/studios, eight from independent production companies) are on track to spend a total of $800 million in-state, including $300 million in qualified wages to more than 4,000 crew and cast members.
The other feature films approved for the latest allocation round also include “A Star is Born” (WB Studio Enterprises), “Callahan” (Amazon Studios), “Flarsky” (Good Universe Films), “Hotel Artemis” (Ink Factory, Inc.), “Marwencol” (Universal City Studios), “Plus One” (Lionsgate), “Stuck at the Office” (Zack Schiler & Associates), “Tag” (New Line Productions), “The Children” (Mutiny Productions), “Timmy Failure” (Newsub 87 Productions), “Unbroken–Path to Redemption” (1440 Productions), and “White Girl Problems” (Lionsgate). This lineup of features is likely to be revised, as applicants may withdraw from the program and their tax credits reassigned to those currently on the wait list.
The next application period for California’s Film & Television Tax Credit Program 2.0 is currently underway (February 10 – 17) for television projects.
How Projects are Selected and Awarded Tax Credits Under Program 2.0
Projects approved for California tax credits are selected based on their jobs ratio score, which ranks each project by wages to below-the-line workers, qualified spending for vendors, equipment, etc., and other criteria. The top 200% ranked projects in each round (i.e., those that would qualify if double the amount of funding was available for the current allocation round) are evaluated, and those with the highest-ranked jobs ratios receive tax credits. Those not selected are placed on the waiting list. The program allocates funding in “buckets” for different production categories, including non-independent feature films, independent films, TV projects and relocating TV series. This enables applicants to compete for credits directly against comparable projects. As has been the case since the state launched its first-generation tax credit program in 2009, the California Film Commission awards tax credits only after each selected project: 1) completes postproduction, 2) verifies that in-state jobs were created, and 3) provides all required documentation, including audited cost reports.
About California’s Film and Television Tax Credit Program 2.0
On September 18, 2014, Governor Brown signed bipartisan legislation to more than triple the size of California’s film and television production incentive, from $100 million to $330 million annually. Aimed at retaining and attracting production jobs and economic activity across the state, the California Film and TV Tax Credit Program 2.0 also extends eligibility to include a range of project types (big-budget feature films, TV pilots and 1-hr TV series for any distribution outlet) that were excluded from the state’s first-generation tax credit program. Other key changes include replacing the prior lottery system with a “jobs ratio” ranking system that selects projects based on wages paid to below-the-line workers, qualified spending (for vendors, equipment, etc.) and other criteria. Program 2.0 also offers an additional five percent tax credit for non-independent projects that shoot outside the Los Angeles 30-mile zone or have qualified expenditures for visual effects or music scoring/track recording. More information about California’s Film and Television Tax Credit Program 2.0, including application procedures, eligibility and guidelines, is available here.
