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§ 5539. Tax Credit Allocation.

10 CA ADC § 5539Barclays Official California Code of RegulationsEffective: February 8, 2024

Barclays California Code of Regulations
Title 10. Investment
Chapter 7.75. California Film Commission
Article 4. California Soundstage Filming Tax Credit Program
Effective: February 8, 2024
10 CCR § 5539
§ 5539. Tax Credit Allocation.
(a) The California Soundstage Filming Tax Credit Program allows for a qualified taxpayer that meets all eligibility criteria and submission requirements under this Program to receive a credit against the “net tax,” as defined in Revenue and Taxation Code section 17039, or the “tax,” as defined in Revenue and Taxation Code section 23036.
(b) The tax credit awarded under this Program is allowed for taxable years beginning on or after January 1, 2022, and before January 1, 2032, and the total amount of credits that may be allocated under this Program is one hundred fifty million dollars ($150,000,000).
(c) Once approximately seventy-five percent (75%) of the Program's available credit funding has been reserved, the CFC will issue a production alert and post on its website that the Program is nearing reservation of its full funding and will cease to accept applications for Phase A on the date that is 30 business days after issuance of the production alert and website post (the “designated date”). Phase A applications will only be accepted after the designated date for soundstage construction or renovation projects that were issued a foundation permit or a structural building permit as per Revenue and Taxation Code sections 17053.98(k)(2)(A)(iv) and 23698(k)(2)(A)(iv) and through the designated date. No other Phase A applications will be accepted unless and until the Program receives additional funding.
(d) The tax credit awarded under this Program, subject to allocation by the CFC, will be in an amount equal to 20 percent or 25 percent, whichever is the applicable credit percentage described in Revenue and Taxation Code sections 17053.98(a)(4) and 23698(a)(4) of the qualified expenditures paid or incurred during the taxable year by a qualified motion picture produced in the state at a certified studio construction project. The tax credit may also be increased by Revenue and Taxation Code sections 17053.98(k)(3) and 23698(k)(3), regarding the credit percentage increase for diversity goals achievement.
(e) Notwithstanding subdivision (d), no certified motion picture will be allocated more than the cap sum specified in sections 17053.98(k)(8)(B) and 23698(k)(8)(B) of the Revenue and Taxation Code. Recurring television series that previously received an allocation under this Program for a season shall not be allocated more than the cap sum specified in sections 17053.98(k)(8)(B) and 23698(k)(8)(B) of the Revenue and Taxation Code for subsequent seasons that qualify for this Program.
(f) Motion pictures that have previously received a tax credit allocation under Revenue and Taxation Code sections 17053.98(a)-(j) and 23698(a)-(j), for the fiscal year, are not eligible to receive an allocation under this Program.
(g) If a tax credit allowed by this Program exceeds the taxpayer's computed tax liability, the excess credit may be carried over to reduce the “net tax” or “tax,” as applicable, in the following taxable year, and succeeding eight taxable years, if necessary, until the credit has been exhausted.
(h) The relationship between the California Soundstage Filming Tax Credit Program and the California Film and Television Tax Credit Program 3.0 and its successor programs is defined and shall occur as follows:
(1) A qualified motion picture, other than a recurring television series, that satisfies the criteria of the California Soundstage Filming Tax Credit Program but that does not receive a credit allocation under this program because the total amount of credits has been allocated or because the period of certification for the soundstage or soundstages where the project is filming has expired, may apply for a credit allocation under the California Film and Television Tax Credit Program 3.0 or its successor programs subject to a jobs ratio enhancement of 133 percent, pursuant to sections 17053.98(g)(2)(D)(iv)(II) and 23698(g)(2)(D)(iv)(II) of the Revenue and Taxation Code.
(2) A recurring television series that satisfies the criteria of the California Soundstage Filming Tax Credit program but is no longer eligible for a credit allocation under this program because the total amount of credits has been allocated or because the period of certification for the soundstage or soundstages where the project is filming has expired shall receive a credit allocation under the California Film and Television Tax Credit Program 3.0 or its successor programs, pursuant to sections 17053.98(g)(2)(D)(v) and 23698(g)(2)(D)(v) of the Revenue and Taxation Code.
(3) A qualified motion picture may fulfill the ownership or tenant requirement of sections 17053.98(k)(2)(B)(iii) or 23698(k)(2)(B)(iii) of the Revenue and Taxation Code with a certified studio construction project for which the period of certification has expired for purposes of being eligible to apply for or receive an allocation of tax credits under the California Film and Television Tax Credit Program 3.0 or its successor programs, as described in paragraphs (1) and (2) above, when a reason for ineligibility under the California Soundstage Filming Tax Credit Program is that the period of certification for the certified studio construction project has expired.

Credits

Note: Authority cited: Sections 17053.98(k)(10) and 23698(k)(10), Revenue and Taxation Code; and Section 11152, Government Code. Reference: Sections 17039, 17053.98(i)(4), 17053.98(k)(1)-(4), 17053.98(k)(8)-(9), 17053.98(k)(11), 17053.98(a), 23036, 23698(i)(4), 23698(k)(1)-(4), 23698(k)(8)-(9), 23698(k)(11) and 23698(a), Revenue and Taxation Code; and Section 14998.1, Government Code.
History
1. New section filed 4-11-2022 as an emergency; operative 4-11-2022 (Register 2022, No. 15). A Certificate of Compliance must be transmitted to OAL by 10-10-2022 or emergency language will be repealed by operation of law on the following day.
2. New section refiled with amendments to section and Note 10-3-2022 as an emergency; operative 10-11-2022 (Register 2022, No. 40). A Certificate of Compliance must be transmitted to OAL by 1-9-2023 or emergency language will be repealed by operation of law on the following day.
3. Refiling of 10-3-2022 emergency on 1-9-2023; operative 1-10-2023 (Register 2023, No. 2). A Certificate of Compliance must be transmitted to OAL by 4-10-2023 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 10-3-2022 order, including amendment of Note, transmitted to OAL 1-3-2023 and filed 2-15-2023; amendments effective 2-15-2023 pursuant to Government Code section 11343.4(b)(3) (Register 2023, No. 7).
5. Amendment of subsections (e) and (h), repealer of subsections (h)(1)-(h)(1)(A) and new subsections (h)(1)-(3) filed 8-18-2023 as an emergency; operative 8-18-2023 (Register 2023, No. 33). A Certificate of Compliance must be transmitted to OAL by 2-14-2024 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 8-18-2023 order transmitted to OAL 12-26-2023 and filed 2-8-2024 (Register 2024, No. 6).
This database is current through 4/5/24 Register 2024, No. 14.
Cal. Admin. Code tit. 10, § 5539, 10 CA ADC § 5539
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