California and New York incentive updates, courtesy GPP’s Craig Miller



The California Legislature approved tax credits for film and television productions (see ABX3 3) as part of an economic stimulus provision of the new state budget on February 19, 2009. The following summarizes the key points of the California production tax credit:

For taxable years beginning on or after January 1, 2011, qualified taxpayers are allowed a credit against income and/or sales and use taxes, based on qualified expenditures multiplied by:

  • 20% for a “qualified motion picture” (produced for distribution to the general public), including:
    • Features ($1 million – $75 million production budget)
    • Movies of the week or miniseries ($500,000 minimum production budget)
    • New television series licensed for original distribution on basic cable ($1 million minimum budget; one-half hour shows and other exclusions apply)
  • 25% for a “qualified motion picture,” including:
    • A television series that relocated to and was never in California (certain exclusions apply including one-half hour shows)


    • An “independent film” ($1 million − $10 million budget that is not produced and directly or indirectly owned 25% or more by a publicly traded company)

To be eligible, a “qualified motion picture” must meet the following conditions: 

  • 75% test (production days or total production budget) in California 
  • Postproduction completed within 30 months of receiving tax credit application approval
  • Registration of copyright for the motion picture with US Copyright Office
  • Principal photography commences after application approval but no later than 180 days after such approval

“Qualified expenditures” are amounts paid or incurred for the purchase or lease of tangible personal property and payments, including “qualified wages,” for services performed in California. Qualified wages must meet California wage reporting requirements and explicitly exclude certain expenses, such as:

  • wages related to writers, directors, music directors, music composers, music supervisors, and producers 
  • wages related to performers, other than background actors with no scripted lines.

The California Film Commission may allocate tax credits after July 1, 2009, through July 1, 2014. Applications will not be accepted before July 1, 2009, and are considered on a first-come, first-served basis. 

Funding is allocated as follows:

  • $100 million annually beginning fiscal year 2009/2010 through fiscal year 2013/2014 
    • Credits may be allocated from a fiscal year in which the credit was originally applied for or the immediately succeeding fiscal year, so $200 million may be allocated during fiscal year 2009/2010
  • $10 million of the annual funding shall be set aside for independent films
  • Unused funds carryover to the next fiscal year

Qualified taxpayers may carryover tax credits for 5 years and transfer tax credits to an affiliate. Only tax credits issued to an independent film may be transferred or sold to an unrelated party.





New York State

Funds for the New York State Film Production Tax Credit have been exhausted. The New York State Film Office is still accepting applications in case eligible projects fall through or more funding becomes available. Funding is still available for the Commercial Production Tax Credit.