In this year’s 2023-24 budget agreement (SB 101 - Budget Act of 2023), signed by Governor Newsom on July 10, 2023, the state’s film and television tax credit was extended and revised under SB 132, a budget trailer bill, making it refundable with new diversity and safety provisions.
California law currently allows a credit for taxable years beginning on or after January 1, 2022, and before January 1, 2032, in an amount equal to 20 or 25% of qualified expenditures paid or incurred during the taxable year by a qualified motion picture produced in the state at a certified studio construction project. For taxable years beginning on or after January 1, 2025, the new Film and Television Tax Credit Program 4.0 will launch by the California Film Commission on or after July 1, 2025, and before July 1, 2030, and allow an amount equal to 20 or 25% of qualified expenditures for the production of a qualified motion picture in the state and would require the credit to be administered in accordance with the existing motion picture credit, except as specified.
A diversity workplan, in addition to existing requirements, would be specified to include information relating to goals the motion picture will seek to achieve in terms of disability status. Failure to provide this additional information would result in a 4% reduction in the film credit allowed.
For taxable years beginning on or after January 1, 2025, qualified taxpayers would be allowed to elect to be paid a refund if the amount allowable as a credit exceeds the qualified taxpayer’s tax liability for the taxable year. Additionally, the credit would be allowed to reduce regular tax below the tentative minimum tax.
This bill would establish the Safety on Productions Pilot Program. Beginning on July 1, 2025, and until June 30, 2030, inclusive, the program would require that an employer for a motion picture production that receives a motion picture tax credit hire or assign a qualified safety advisor for California filming activities to be present on every production and perform a risk assessment. The bill would require production to conduct a daily safety meeting with the safety advisor present, including times when firearms are involved in a scene.
Please contact our Ryan tax professionals for additional information.
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