SB 951: Taxes: credits: motion pictures: Legislative Analyst’s Office report.

Session Year: 2017-2018
House: Senate

Version:

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including motion picture credits for taxable years beginning on or after January 1, 2016, to be allocated by the California Film Commission on or after July 1, 2015, and before July 1, 2020, subject to a computation and ranking of applicants based on a jobs ratio. Existing law allows the credit for the taxable year in which the commission issues a credit certificate for the qualified motion picture for the applicable percentage of all qualified expenditures, as defined, paid or incurred by the qualified taxpayer in all taxable years for that qualified motion picture. Existing law limits the aggregate amount of these credits allocated in each fiscal year to $330 million, through and including the 201920 fiscal year, except as provided. Existing law requires an applicant for the credit to file an application that contains certain information. law, in lieu of the above-described credits, allows application of the credit amount against qualified state sales and use taxes, as provided. Existing law requires the Legislative Analysts Office to prepare reports related to the effectiveness and administration of the qualified motion picture credit under the Sales and Use Tax Law, the Personal Income Tax Law, and the Corporation Tax Law on or before January 1, 2019.

This bill would establish similar credits under the Personal Income Tax Law and the Corporation Tax Law for taxable years beginning on or after January 1, 2020, to be allocated by the California Film Commission on or after July 1, 2020, and before July 1, 2025, except as provided. This bill would allow a credit in an amount equal to 20% or 25% of qualified expenditures for the production of a qualified motion picture in this state, with additional credit amounts allowed, including for amounts equal to specified qualified expenditures and qualified wages relating to original photography outside the Los Angeles zone, as specified. instead provide that the Legislative Analysts Office prepare the report on or before January 1, 2023.

This bill would limit the aggregate amount of these new credits to be allocated in each fiscal year to $330,000,000 plus additional specified amounts. The bill, subject to a computation and ranking of applicants based on the jobs ratio, as defined, would require the California Film Commission to allocate credit amounts subject to specified categories of qualified motion pictures in 2 or more allocation periods per fiscal year beginning on or after July 1, 2020, and issue credit certificates. The bill would also require an applicant for the credit to include in the application the applicants written policy against unlawful harassment, as specified.Existing law, for taxable years beginning on or after January 1, 2016, in lieu of the credits authorized under the Personal Income Tax Law and the Corporation Tax Law for qualified motion pictures described above, also allows application of the credit amount against qualified state sales and use taxes, as provided. This bill, for taxable years beginning on or after January 1, 2020, in lieu of the credits authorized under the Personal Income Tax Law and the Corporation Tax Law for qualified motion pictures described above, would allow application of the credit amount against qualified state sales and use taxes, as provided.This bill would take effect immediately as a tax levy.

Discussed in Hearing