Record 322 Applicants for CA Tax Credit; Nearly Doubles Last Year’s Number

A record 322 applicants submitted projects for the California Film & Television Tax Credit Program last Friday, hoping to be chosen at random for the 20-25% nonrefundable credit for qualifying features and TV series. Because the $100 million annual allotment to the credit is typically not enough to cover all the productions that apply, a lottery is used to select the applicants that actually receive the credit. This year the lottery process, which is completed in one day, drew nearly twice as many submissions as 2011.

Once an application is submitted and vetted by the California Film Commission, it is placed in a queue. During the lottery, queue numbers are chosen at random, and those projects are given the opportunity for a tax credit allocation. Projects that do not get selected in the lottery are placed on a waiting list and offered allocations as they become available due to withdrawals, disqualifications, cancellations of projects, etc. This year, 28 projects were selected out of the 322, though many more from the waiting list could end up receiving credits – for example, last year there were 27 projects selected, but 74 ended up benefiting in the end.

While the film & TV tax credit program is set to expire in a year, a bill has been proposed in the California Assembly to extend the program in the state through 2018. The original tax credit was created in 2009. While the $100 million annual budget and 20-25% credit are considered modest in film incentive terms – consider New York’s 30% state film tax credit, funded by over $400 million per year – the California credit is viewed in some studies as a pivotal factor in a windfall in film production and thousands of production jobs created in the state since the program was initiated.

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