California Film & Television Tax Credit Program: The Lowdown, What, Why, How & When!!!

HOLLYWOOD COOP: GRIP, LIGHTING &PRODUCTION SUPPLIES Hollywood Coop presents: "California Film & Television Tax Credit Program" for Dummies! Welcome to HollywoodCoop, where we take care of your production needs  This month we are going to have a quick look at the new California Film and Television tax credit program, we will break it down simply and show how to get it. We will take a brief look at the commentary and steer clear of political bias and objectively assess how it may impact our state and our industry. Before we do that just want to mention our FREE STEALTH PRODUCTION PACKAGE FROM HOLLYWOOD COOP. We are offering a free stealth production package with any camera package rental from Old School Cameras, our brother company. The economics are obvious but the logistics of one location, one stop to cover your needs is awesome. This is something we are hoping to develop and improve further, so check back and see how we can improve your bottom line! Please see the banner at the bottom of the page or contact us to learn more.  info@oldschoolcameras.com orinfo@hollywoodcoop.com give us a call: 818 847 1555. We just want to give a quick guide to New California Tax incentives, “California Film & Tax Credit Program AB 1839”, that was signed in to law By Jerry Brownon Sept 18th. This will impact all of us in the Film and Television industry, from small (commercials and Music videos) to large projects (Feature Films, TV series). Big and small budget, all hopefully for the best. I want to keep this short and simple, highlighting the key points so you can know precisely what and who will directly benefit, and how you can take advantage of this. Here are the Basic points that you should know:   Increases Existing funding from $100m to $330m per year. 25% tax credit:   Television series (that shot previously outside of CA) & Indie Films, $1m min budget.  20% tax credit: Feature Films and New television series (per episode budget)with $1m min budget, Movie of week(min $500k budget). Expands Eligibility to big budget feature films, 1 hour TV series & TV pilots. Eliminates budget caps for studio & independent films. While no caps, tax credit eligibility applies to projects first $100m in qualified spending for Studio films. $10m for independent. No more tax credit lottery, Projects selected on jobs ratio formula, and other ranking criteria Projects will compete within categories for tax credit, not the industry as a whole, TV against TV, independent films against independent films, etc. Penalties for overstated job creation! Multiple, instead of a single, allocation period throughout year. Still under development, but looks like 1 or 2 periods first year,  more than 2 year 2 to 5. 5% uplift for productions that film outside 30 mile zone 5% uplift for Visual effects and music scoring recording in state. These Tax credits apply only to qualified spending, here are links for specific categories. Movie – Mini-Series – Movie of the Week. TV 1 Hour TV 1/2 Hour What does this mean to us, as Industry participants and Californians? Ok, more money great! Expanded eligibility good! Get rid of budget caps sounds ok, no caps but limited credit, could be better, but good to be grateful for anything we can get, allows more of the $330m to be shared around? Compete on jobs formula, sounds good, basically that is what the incentive is for our profit margin is secondary. Competing within categories is much better than competing within industry as a whole! Regarding Penalties, Creative bookkeeping pundits’ keep it honest, otherwise you will be funding rather than receiving the tax credit! Multiple allocation periods allows for organic project development rather than rushing to get it ready for the one and only window of opportunity, hopefully avoiding rushed and impaired project development or getting placed on the “back burner” for the next allocation period, (we all know how that works out!).  More money for Visual effects and music scoring,  more feet on the ground here in California for post production? Anyone remember Rhythm & Hues amazing work on the “Life of PI”, only to declare bankruptcy as outsourced CGI heavily competes with local talent? More money out of 30 mile zone, I guess share the wealth at a more state wide level? The Process: Quick guide to application process. Firstly, Credit allocations will be not issued to or on July 1st 2015, and principal photography cannot begin before receiving credit allocation. The first allocation period is May 2015 and that is for TV only, Film to be announced later. Refer to the checklist on ca.gov website(regularly), for full information as this may change.   You will initially need the following to get the process rolling. Principal photography start date, end date # of  shoot days. Key cast and crew Indies have to fill out independent film declaration Financing sources Not less than 60% of production cost must be listed. The following supporting Documentation: Budget One Line Shooting Schedule with scene descriptions. Synopsis Screenplay Relocation Statement Financing “backup” documentation. There will be further documentation further down the line once Tax credit eligibility is determined . 20 days after receipt of application the commission will notify the applicant by email of status. 4 weeks prior to principal photography production accountant must meet with CFC. That is a brief summary please go to Summary To verify, as this will most probably change. In conclusion, we are not experts and you need to verify all statements made here with  the CFC , any statements made here are just our opinion and not to be taken as fact. Remember the intent of the incentives is not only to benefit the motion picture industry, the intent is to benefit California, of which this industry is a large and important component. So while these incentives do not (directly) benefit the lower budget smaller projects, who most probably are not going out of state on their budget anyway, it does benefit the large budget projects that are very cost sensitive and probably places us within their margin requirements. Sorry folks it is not about art, what is fair, wrong or right, it is just about $$$$ and benefiting California’s general public by creating jobs and generating consumer spending from the compounding effect of business expense. It also may not be directly neutral in the income it generates directly offsetting the incentive expense, however if you consider the indirect effect of an improving economy with more business expense, which means more people eating, more people buying consumer products, because they now have money. Consider this secondary sales tax and income tax income it may well become neutral or beneficial for the State. Bottom line, don’t want to get political, just trying to weigh pros and cons for those of us in this industry. The motion picture industry is definitely a California legacy, and needs to kept alive in this state for cultural as well as financial reasons. We need to be able to compete with Vancouver, Louisiana and New York on a level playing field. We hope this achieves that, and benefits most of us, if not directly, then indirectly. If you have any suggestions or comments please go to the blog and post!   FREE STEALTH PRODUCTION PACKAGE FROM HOLLYWOOD COOP Our Goal: to improve your bottom line, make your life easier and improve your professional standing. Please Contact us to learn more:  info@oldschoolcameras.com  info@HollywoodCoop.com give us a call: 818 847 1555.   If you are interested in cinematography, check out this blog from our brother in arms at Old School Cameras. They are doing a series on vintage lenses and why they are in such high demand.These guys have some great lenses(cameras too) to rent! HOLLYWOOD COOP: GRIP, LIGHTING &PRODUCTION SUPPLIES

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FREE STEALTH PRODUCTION PACKAGE FROM HOLLYWOOD COOP Our Goal: to improve your bottom line, make your life easier and improve your professional standing. Please Contact us to learn more:  info@oldschoolcameras.com  info@HollywoodCoop.com give us a call: 818 847 1555.   If you are interested in cinematography, check out this blog from our brother in arms at Old School Cameras. They are doing a series on vintage lenses and why they are in such high demand.These guys have some great lenses(cameras too) to rent!