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California Incentives Continue to Combat Other States’ Tax Breaks and Stem Runaway Production

In 2014, the state of California increased the annual allocation for its film tax incentive program from $100 million to $330 million. The expansion covers five years and $1.65 billion in tax credits. The credit is set at 20%, with a 5% uplift for shooting outside the official 30-mile Los Angeles zone.

Applications are ranked based on how many jobs they will produce – an actual jobs ratio score – unlike the old method whereby the breaks were awarded via a lottery system. By many accounts, the program has helped boost film and TV production in the Golden State, although other states such as Georgia and New York continue to compete hard.

The program expansion, enacted by California lawmakers and signed by Gov. Jerry Brown, covers five years and $1.65 billion in tax credits.

In addition to the 20% standard credit, a 25% non-transferable is available for relocating TV series, a 25% transferable tax credit is offered for independent films, and a 20% non-transferable tax credit is available for feature films, TV movies and miniseries, new TV series and TV pilots. The maximum credit a production can earn from the state is 25%

Recent productions availing themselves of California’s incentives include TV’s “Twin Peaks,” “Westworld” (pictured above), “This Is Us,” “Crazy Ex Girlfriend” and “Animal Kingdom.” Recent features taking advantage of the California program include “Wrinkle in Time,” “Suburbicon” and “Battle of the Sexes.”

Incenitves
20% Nontransferable tax credit for features, TV movies and miniseries, new TV series and pilots
5% Credit uplift for projects shot outside the 30-mile Los Angeles Studio Zone and for music and visual effects
Information courtesy of EP Financial Solutions, a production incentive consulting and financial services company.

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