California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 2
TABLE OF CONTENTS
Executive Summary
Introduction
Page #
5 | Coronavirus (Covid-19) Pandemic and its Impact on the Entertainment Industry
7 | Tax Credit Program 3.0 Overview
10 | Program 3.0 Statistics
12 | Relocating Television Series
13 | Big-Budget Feature Films
13 | Regional Filming Impact
15 | Career Readiness Requirement
19 | Career Pathways Program
21 | Diversity Initiatives
22 | Infrastructure Usage and Growth
23 | Lost Productions
24 | Global Competition
31 | California Soundstage Filming Tax Credit Program
Conclusion
Sources
Appendices
ABOUT THE CALIFORNIA FILM COMMISSION
The California Film Commission (CFC) was created in 1984 as a state agency to enhance California’s position as the premier location for all
forms of media content creation.
The CFC supports film, television, and commercial productions of all sizes and budgets by providing one-stop support services including location
and troubleshooting assistance, permits for filming at state-owned facilities, and access to resources including an extensive digital location
library. The CFC also administers the state’s Film & Television Tax Credit Program and serves as the primary liaison between the production
community and all levels of government (including local, state, and federal jurisdictions) to facilitate filming in-state.
The CFC supports a production-friendly environment to retain and grow production jobs and economic activity statewide. It works in
conjunction with more than 50 local film offices/commissions (Regional Film Partners) across California to manage filming-related issues and
requests. More information is available at http://www.film.ca.gov.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 3
EXECUTIVE SUMMARY
The California Film Commission (CFC), housed under the Governor’s Office of Business and Economic Development (GO-Biz),
administers California’s film and television tax credit programs. The programs were created as targeted economic stimulus initiatives
designed to increase film and television production, jobs, and tax revenues in California. The CFC issues an annual report to provide
the public with an assessment of each of the program’s economic benefit to the state, as well as statistical information and insights
into California’s entertainment production industry. This report provides an overview of the third iteration of California’s tax credit
program (“Program 3.0”) which wrapped its 2020-2021 fiscal year on June 30, 2021. The 48 approved projects for fiscal year one of
Program 3.0 are estimated to generate $2.6 billion in direct in‐state spending, including more than $992 million in qualified wages.
The 48 projects comprised of 14 non-independent feature films, 4 independent projects with budgets over $10 million, 13 independent
projects with $10 million budget or less, 12 recurring television series, and 5 relocating television series.
❖ Covid-19 and Filmmaking: Covid-19 continued to have a
substantial impact on filming in California during the 2020-
2021 fiscal year. Productions must follow safety protocols to
avoid the spread of Covid-19. Testing became a mandatory
part of the filmmaking process, with those crew in close
contact with talent testing daily.
❖ Big Budget Films: During the 2020-2021 fiscal year, 6 films
with budgets over $60 million were admitted into Program 3.0
resulting in an estimated $683 million in total spending in
California. Collectively, the 6 projects are estimated to
employ 1,961 cast and crew members with a $276 million in
total qualified wages in California.
❖ Regional Filming in California: More than 25 dozen feature
films and television series are projected to film 490 days out
of 894 in-state shoot days (54%) in counties throughout
California including San Bernardino, San Luis Obispo, San
Diego, and Siskiyou.
❖ Career Readiness Requirement: Approximately 85
productions under Programs 2.0 and 3.0 hired more than 200
interns to fulfill the Career Readiness Requirement, resulting
in approximately 41,000 hours of paid work. A total of 65
faculty members were invited by 33 projects to experience an
externship, while 25 productions selected to host a classroom
workshop and/or panel. Close to 400 students and teachers
participated in a professional skills tour, which were hosted
by 33 projects.
❖ Career Pathways Program: Senate Bill 878 created a
training and outreach program for individuals from
underserved communities. The program enlisted participants
despite the challenges presented by the pandemic. To date,
approved projects under fiscal year 2020-2021 have
contributed $837,000 to the Career Pathways Program.
❖ Diversity and Inclusion: New to Program 3.0, all approved
projects must submit the company’s initiatives and programs
to increase the representation of women and minorities.
Company statements reflect a desire to see diversity
improved among above and below-the-line personnel within
the entertainment industry and take affirmative measures to
ensure a diverse cast and crew.
❖ Infrastructure Usage and Growth: Per FilmLA, application
activity for Los Angeles film permits jumped 45% in March
2021 compared to February 2021. and leasing of soundstage
space is expected to soar. A significant issue currently
confronting feature and television projects wishing to film in
California/Los Angeles is a shortage of stage space.
❖ Lost Productions: Surveyed projects – mainly with smaller
budgets - that applied but ultimately filmed in California
without receiving tax credits generated $60 million in the
state. However, larger, runaway projects accounted for $266
million in production spending outside California - a loss to
the state’s below-the-line production workers and the
ancillary businesses that rely on the film and television
production industry. This disparity emphasizes the
importance of tax credits, particularly for retaining larger
budgeted productions.
❖ Global Competition: Worldwide competition continues to
siphon film and TV production from the state. The industry
continues to pursue other jurisdictions that offer robust tax
credits, significant infrastructure, and generous visual effects
incentives.
California Soundstage Filming Tax Credit Program: In July 2021, Governor Gavin Newsom signed Senate Bill 144 which creates a new
tax credit program. Under the new statute, a first-come-first-served program will allocate up to $150 million in tax credits to qualified
projects filming in CFC-certified new or renovated soundstages; no jobs ratio ranking required.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 4
INTRODUCTION
According to an April 2021 report by the Motion Picture Association (MPA), the film and
television industry employs more people nationwide than other major industry sectors,
including mining, oil & natural gas extraction, crop production, utility system construction,
and rental & leasing services. Across the United States, the entertainment industry supported
more than 2.5 million jobs, including 331,000 direct jobs engaged in producing, marketing, and
manufacturing motion pictures, television shows, and video content; direct jobs totaling
579,000 were engaged in distributing motion pictures, television shows, and video content to
consumers.
1
The California Film Commission (CFC), part of the Governor’s Office of Business and Economic
Development, incentivizes film and TV production in the state by administering film and
television tax credit programs. First enacted in 2009, the tax credit program was created to
provide economic stimulus designed to increase film and television production, jobs, and tax
revenues in California. The CFC publishes an annual report to provide the public with an
assessment of the program’s economic benefit, as well as statistical information and insights
into California’s entertainment production industry and its competition. This report provides a
summary of approved projects from the first fiscal year of Program 3.0 – the third iteration of
the tax credit program. Data from July 1, 2020 to June 30, 2021 includes a breakdown of labor
and expenditures, an analysis of television series that relocated to California, a summary of
big-budget films, regional filming data, and career readiness requirement data. New in this
report are approved applicant summaries of diversity and inclusion initiatives and data on
the pilot career pathways program.
In addition, this report provides an analysis of productions that applied but did not receive
tax credits, and ultimately left California to film in other parts of the country and the world.
Year after year, consistent data shows that other locales entice filmmakers by offering
competitive production and post-production (including visual effects) incentives along with
new or expanded production infrastructure.
Regardless of growing infrastructure and competitive tax credits, production worldwide came
to a halt in mid-March 2020 due to the Coronavirus global pandemic.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 5
CORONAVIRUS (COVID-19) PANDEMIC AND ITS
IMPACT ON THE ENTERTAINMENT INDUSTRY
In mid-March 2020, the coronavirus pandemic forced many productions to pause
production. Working remotely from home, CFC staff remained fully functioning to provide
regular services while adjusting to the latest industry and government developments. On
March 27, 2020, the CFC published a production alert outlining Covid-19 resources and
established Covid-19’s impact on film production as a force majeure event. This enabled
productions to apply and receive waivers for all the time-sensitive parameters in the tax
credit program, thus alleviating the fear that projects would lose their reservation of tax
credits if they could not begin or finish their projects as per program requirements. The CFC
continues to evaluate the impact of the pandemic on CFC projects and issue force majeure
waivers as appropriate.
On June 1, 2020, with combined efforts from studios and unions, the Industry-Wide Labor-
Management Safety Committee Task Force published the “white paper” – a proposed set of
health and safety guidelines for motion picture, television, and streaming projects to resume
production during the Covid-19 pandemic. Since many productions shoot predominantly in
the Los Angeles area, the Los Angeles County Department of Public Health published specific
guidelines on June 12, 2020 outlining minimum safety requirements for any Los Angeles
productions, including commercials and small independent projects. Productions filming
outside Los Angeles County were mandated to adhere to county-specific Covid-19 filming
protocols. The Producer’s Guild of America also published “COVID Safety Protocols For
Producing Independent
Productions” in August
2020. “The Safe Way
Forward,” a set of
protocols released by
the unions and guilds,
was replaced by the
“Covid-19 Return to
Work Agreement” on
September 21, 2020.
This agreement was
negotiated by the
Alliance of Motion
A fan favorite, television series
Lucifer
relocated to California from British Columbia, Canada.
Image Source: Warner Bros.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 6
Picture and Television Producers (AMPTP) with the Director’s Guild of America (DGA),
International Alliance of Theatrical Stage Employees (IATSE), Screen Actors Guild – American
Federation of Television and Radio Artists (SAG-AFTRA), Teamsters and Basic Crafts. It was
effective until April 21, 2021, and then extended to June 30, 2021. All parties involved met
regularly to discuss possible modifications to the agreement based on changing Covid-19
conditions. On June 30, 2021, as the AMPTP, DGA, IATSE, SAG-AFTRA, Teamsters and Basic
Crafts needed to assess further modifications, the return-to-work Covid-19 safety protocols
were extended indefinitely.
Covid-19 continued to have a huge impact on filming in California during the 2020-2021 fiscal
year. Productions had to follow safety protocols in order to avoid the spread of Covid-19,
including establishing at least four different pods within the crew, which operate in concentric
circles of distance from the on-camera talent. Testing became a mandatory part of the
filmmaking process, with crew members that come in close contact with talent getting tested
daily. A whole new Covid Department came into existence, with the responsibility of ensuring
on-set health and safety. Duties of the Covid department include supervision of sanitary
conditions, enforcement of mask-wearing and the use of face shields, oversight of social
distancing within the different departments, and supervision of quarantine for new
employees and production visitors, as well as for any cast and crew testing positive or
experiencing Covid-like symptoms.
Covid departments typically range from two or three people on lower budget projects and up
to as many as 15 people on large crews with multiple units. Labor positions include Covid
Supervisor, Covid Coordinator, Covid protocol compliance managers, Set Sanitation PAs,
Covid Testers, Covid Medical personnel, and additional Drivers and Locations Assistants to
help maintain social distancing. Materials include tests, sanitation stations, face shields, PPE
masks, outside testing contractors and medical personnel, additional vehicles, and stipends
paid to crew to quarantine or work remotely.
The CFC allows all Covid-related expenditures in the state to qualify for tax credits. Project
budgets submitted for review in the tax credit program indicate that approximately 40% of
Covid expenditures go to Labor costs and 60% go to Materials. Aggregate data shows that
feature films with budgets greater than $20M in the Tax Credit Program typically anticipate
spending between 5% and 6.5% of their total budgets on Covid-related costs. This translates
to approximately 9% of their Qualified Expenditures. Low-budget films and television series
typically anticipate about 4.25% of their total budgets for Covid-related costs and about 6.2%
of their Qualified Expenditures.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 7
The raw numbers are far more startling: 50 projects currently in the Tax Credit Program are
expecting to outlay more than $90,000,000 for Covid-related costs, in aggregated budgets
totaling $1.9 billion.
TAX CREDIT PROGRAM 3.0 OVERVIEW
The CFC developed regulations, program guidelines, and other procedures to administer a
newly extended tax credit program (“Program 3.0”) which became effective on July 1, 2020
with the signing of Senate Bill 878 (SB 878). (See Appendix A for enacting legislation.) With
$330 million per fiscal year, Program 3.0 runs from July 2020 through June 2025. SB 878 made
several modifications to Program 2.0, which had a sunset date of June 30, 2020. (See
Appendix B for comparison chart.)
Annual Tax Credit Allocation Breakdown
Each fiscal year, the $330 million in available funding is divided into five different funding
buckets that target different categories of production. Television projects (new or recurring
TV series, pilots, mini-series) and non-independent feature films are eligible to receive 20%.
Independent films (bifurcated in two categories depending on budget size) and relocating TV
series - in their first season filming in California - qualify for a 25% tax credit. The chart below
shows available funding for each category. Under SB 878, the proportion of credits for the
relocating TV category is reduced from 20% to 17%, as compared to Program 2.0. The credits
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 8
available for the independent film category increased from 5% to 8%. Funding for
independent film is split into two categories - under $10 million and over $10 million budgets -
allowing for more access to the program for smaller budgeted independent films and more
funding overall for independent films. Program Guidelines provide further details on project
eligibility requirements.
Similar to the previous program, Program 3.0 follows a Jobs Ratio Ranking system to select
projects for tax credits. Several application windows are held each fiscal year for specific
project categories. Projects compete against the same project category. A step-by-step
calculation of the jobs ratio is shown below; numerous resource materials are available to
applicants outlining the jobs ratio selection process.
The adjusted jobs ratio is comprised of the base jobs ratio and bonus points. The base jobs
ratio may be increased based on activities in three areas: out-of-zone filming, visual effects
spend, and music labor expenditures. Approved projects under Program 2.0 were able to use
filming in approved soundstages as a bonus points factor; for Program 3.0, this factor has
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 9
been eliminated and was replaced with expenditures on music wages. As a result, receiving
a 5% uplift for music labor and non-labor expenditures were eliminated.
All approved projects, regardless of the production type, are eligible to receive an additional
5% credit on wages paid to individuals who live and work on tax credit projects outside the
City of Los Angeles 30-mile zone; this is a new uplift under Program 3.0. Non-independent
productions continue to be eligible to receive 5% additional credits for visual effects. Also
new under Program 3.0, expenditures on visual effects may now be bifurcated as 70%
attributed to wages and 30% to non-wages. Applicants are advised to review the Budget
Tagging and Tracking Tips, which provide a description for each bonus point factor and uplift.
Applicants to Program 3,0 are now required to submit their company’s written policy against
unlawful harassment. This includes procedures for reporting and investigating harassment
claims. This documentation must contain a statement that the company will not retaliate
against an individual who reports harassment. In addition, applicants are required to provide
a copy of the company’s initiatives and programs to increase the representation of minorities
and women in job classifications that are excluded from qualified wages - directors,
producers, writers, actors, etc. The Diversity Initiatives section in this report outlines initiatives
submitted by approved projects.
Once a project is approved in the tax credit program, a number of interim responsibilities are
required in order to receive the final tax credit certificate. New to Program 3.0, all approved
projects are required to participate in the Pilot Career Pathways Training Program. All
applicants receiving a credit allocation letter are required to make a financial contribution to
fund a training program for individuals from underserved communities to receive training for
careers in the industry. A summary of the pilot program is outlined under the Career
Pathways Program section. The current Career Readiness requirement, in which approved
projects must provide career exposure opportunities such as paid internships and in-class
workshops, remains intact.
In addition to existing documentation for the final tax credit certificate, approved projects
under Program 3.0 are now required to submit bifurcated statistics on the gender, race, and
ethnic status of individuals with non-qualified and qualified wages. As this information is not
available until a project is completed and is audited, the CFC does not have any related data
from the first fiscal year of Program 3.0.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 10
TAX CREDIT CERTIFICATES
The initial allocation for each selected project is treated as a reservation of tax credits. Tax
credit certificates are awarded only after selected projects: 1) complete post-production; 2)
verify in-state expenditures; and 3) provide all required documentation, including cost
reports audited by a Certified Public Accountant (CPA). Under Program 3.0, approved
applicants may now extend the date by which principal photography must begin from 180
days to 240 days for projects with budgets over $100M in qualified spending. During the audit
process, the CPA recalculates each project’s Jobs Ratio score and compares it to the
approved application Jobs Ratio score. Penalties apply if the final Jobs Ratio score has been
reduced by a specified amount. Program 3.0 reduces the jobs ratio overstatement penalty
threshold for independent productions to match non-independent productions. Tax Credits
may be utilized beginning in the tax year in which the credit certificate is issued. Independent
productions may transfer or sell tax credits to an unrelated party. Non-independent
productions must utilize the credits against state income tax liability, sales or use tax liability,
and may also assign credits to an affiliate. In July 2020, Governor Gavin Newsom imposed
new tax regulations to offset the California budget deficit due to the Covid-19 pandemic.
(See Appendix C for a summary of credit limitations when utilizing tax credits.)
PROGRAM 3.0 STATISTICS
FISCAL YEAR 2020-2021: AGGREGATE DATA
During fiscal year 2020-2021, $335 million was allocated to 48 film and television projects. In
order to provide tax credits to all the recurring TV series which were grandfathered into
Program 3.0 from 2.0, the program did not accept new TV Series, Miniseries or Pilots during its
first fiscal year. (See Appendix D for Program 2.0 statistics.)
A recurring TV series is defined as a television series or relocating television series (in its
second or subsequent season in California) that received a prior allocation of tax credits. The
48 approved projects for fiscal year one are estimated to expend $2.6 billion in direct in‐state
spending, including more than $992 million in qualified wages. The chart below shows
additional aggregate data.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 11
Fiscal Year 2020-2021 Aggregate Data
48 APPROVED PROJECTS
12
Recurring
Television Series
5
Relocating
Television Series
14
Non-Independent
Films
4
Independent Films
> $10 Million
13
Independent Films
≤ $10 Million
EMPLOYMENT HIRES
5,000
Cast Members Hired
8,000
Crew Members Hired
91,600
Background Players in Man-Days
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 12
RELOCATING TV SERIES
During the 2020-2021 fiscal year, California gained five relocating television projects, giving the
Golden State a total of 27 series that have moved to California under the California Film and
Television Tax Credit Program: Programs 1.0-3.0. (See Appendix E for Program 1.0 statistics.) A
relocating television series is a scripted series of any episode length that filmed its most recent
season (minimum 6 episodes) outside California. This category qualifies for a 25% tax credit,
which is reduced to 20% for any subsequent seasons filmed in California.
The five most-recent relocating television series –
Chad, Hunters, In Treatment, Miracle
Workers, The Flight Attendant
- are projected to film 60 episodes, employ 492 cast, 927 crew,
and 6,093 background players, measured in man-days. Total qualified wages paid to
California workers by these projects are estimated at $174 million.
Relocating TV Series
Image Source: IMDB
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 13
BIG-BUDGET FEATURE FILMS
The 20% tax credit for non-independent productions applies only to the first $100 million in
qualified spending. For independents, the first $10 million of qualified expenditures count
toward the 25% tax credit allocation. During the 2020-2021 fiscal year, seven films with
budgets over $60 million were admitted into Program 3.0 resulting in $683 million in direct
spending within California. Projects like
Gray Man, Here Comes the Flood,
and
Bullet Train
lead
the big-budget list with an estimated total California spend of $392 million. Collectively, the
seven projects are estimated to employ 1,961 cast and crew members with a total of $276
million in qualified wages in California. Measured in man-days, the seven big-budget
features have been projected to produce as many as 17,666 jobs for background players.
Two of the seven big-budget projects plan to shoot outside the city of Los Angeles 30-mile
zone.
Big-Budget Feature Films
Project Title
Qualified Wages
Total Qualified
Expenditures
Tax Credit
Allocation
Ashley’s War
$ 29,538,000
$ 51,086,000
$ 10,709,000
Bullet Train
$ 46,700,000
$ 86,291,000
$ 10,240,000
Gray Man
$ 67,966,000
$ 101,805,000
$ 20,000,000
Here Comes the Flood
$ 46,003,000
$ 68,345,000
$ 13,777,000
Me Time
$ 23,539,000
$ 38,088,000
$ 7,643,000
Scarface
$ 28,512,000
$ 47,790,000
$ 9,852,000
Untitled Live Action Project
$ 34,349,000
$ 61,238,000
$ 12,247,000
Note: Data as of 06/30/2021 for approved projects under fiscal year 2020-2021.
REGIONAL FILMING IMPACT
New to Program 3.0, local hire labor uplift incentivizes applicants to take advantage of hiring
local talent outside the city of Los Angeles 30-mile zone. Non-independent productions -
feature films, new and recurring television series, pilots, or miniseries - are eligible to receive
an additional 10% tax credit for qualified local hire labor. Independent films and relocating
television series are eligible to receive an additional 5% tax credit for qualified local hire labor.
Documentation is required (e.g., California driver’s license, recent utility bill) to substantiate
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 14
where local labor is domiciled. Projects
may also receive up to 10 bonus points to
raise their jobs ratio score and increase
their chance of being selected based on
the percentage of filming days outside the
City of Los Angeles 30-mile zone. When
productions film on location outside the Los
Angeles area, data reflects a typical spend
$50,000 - $150,000
per day
in the local
region. With 33 million acres of forests,
seven million acres of desert, 840 miles of
coastline, 482 cities, and 58 counties,
California provides a large assortment of
location options. (See Appendix F for local
incentives offered throughout the state of
California.)
More than two dozen feature films and television series are projected to film 490 days out of
894 shoot days (54%) in counties across California, including San Bernardino, San Luis Obispo,
San Diego, and Siskiyou. Since many Program 3.0 productions have not begun principal
photography or started filming outside the zone, the CFC has not yet received local
community expenditure data. (See Appendix D for Program 2.0 Regional Filming Data.)
Sir Patrick Stewart on location for
Star Trek Picard
in Santa Ynez Valley, California. Photo Credit: CBS
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 15
CAREER READINESS REQUIREMENT
The Career Readiness requirement mandates all applicants who receive a tax credit
reservation offer or support career-based learning and training programs for students and
career-technical education teachers based in California. In collaboration with the California
Department of Education and the California Community Colleges Chancellor’s Office, the CFC
developed the structure for participation.
Career Readiness Requirement Options
The CFC also engaged non-profit organizations throughout California involved with career-
pathway opportunities for high school and post-high school students, such as
Film2Future, Bay Area Video Coalition, Los Angeles Film School, RespectaAbility,
ManifestWorks, Digital Nest, and Veterans in Media & Entertainment.
To date, about 85 productions under Programs 2.0 and 3.0 hired more than 200 interns to
fulfill the Career Readiness Requirement, totaling approximately 41,000 hours of paid work.
Sixty-five faculty members participated in career-developing externship opportunities across
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 16
33 projects, while 25 productions selected to host a classroom workshop and/or panel. Close
to 400 students and teachers participated in a professional skills tour, hosted by 33 various
projects.
Career Readiness Requirement Statistics
Program 2.0
Program 3.0
Total
Paid Internships
Participating Projects
81
4
85
Internships
198
7
205
Total Hours
38,957
2,100
41,057
Classroom Workshops
Participating Projects
22
3
25
Professional Skills Tours
Participating Projects
32
1
33
Students
358
10
368
Teachers
32
3
35
Faculty Externships
Participating Projects
21
1
22
Teachers
38
27
65
Financial Contributions
Participating Projects
70
1
71
Total Contributions
$517,345
$12,000
$529,345
Due to the pandemic, many
projects selected virtual
options, creating some of
the most unique
educational experiences
held to date. Creative and
Production department
heads from director Joel
Coen’s production of
The
Tragedy of Macbeth
,
starring Denzel Washington
and Frances McDormand,
met, and interacted
virtually with students from
Denzel Washington and Frances McDormand on set of
The Tragedy of Macbeth.
Image Source: A24
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 17
a career-based learning program, providing detailed descriptions of their creative process,
accompanied by drawings, photos, and sketches.
In June 2021, the CFC collaborated with the Arts, Media, and Entertainment (AME) career
technical education program and hosted a Visual Effects virtual event for a select group of 27
California high school teachers. AME programs prepare high school students to enter
California’s thriving creative economy and were established by the California Department of
Education in 2005. AME serves 231,000 students and is the largest career-technical education
industry sector in the state of California.
2
Externships for Los Angeles Unified School District (LAUSD) teachers given by the
Visual Effects
Society,
facilitated by the CFC and California Department of Education, took teachers through
a series of workshops and panels focused on different aspects of VFX. Teachers explored how
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 18
VFX is integrated in live action and animated films: from prep to physical production, and
post-production. The different roles of VFX personnel (design, on-set, technical, and creative)
and the future of VFX and virtual production were also discussed. During the externship,
teachers worked on a project under the supervision of VFX professionals in Adobe After
Effects, an activity that can be duplicated in the classroom. Teachers who did not have
access to this software were provided with a free 90-day trial from AME Institute sponsor
Adobe.
The virtual events noted above created so much interest that future sessions are being
planned. Video recordings of these and other sessions will eventually be added to the CFC
website for student and educator use.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 19
CAREER PATHWAYS PROGRAM
The Career Pathways Program requirement is a pilot program under Program 3.0. Senate Bill
878 created a training and outreach program for individuals from underserved communities.
Funding is provided by projects in the Tax Credit Program. A new requirement under Program
3.0, approved projects are required to contribute 0.25% of their credit allocation to the Career
Pathways Program. To date, approved projects under Fiscal Year 2020-2021 have contributed
$837,000.
Fiscal Year 2020-2021 Funding Contributions
The program provides life skills and professional craft skills training for entry-level positions in
film and television production. The goal is to provide skills and access that leads to careers in
production and membership in the below-the-line craft unions. The Program seeks to attract
new and diverse talent, create a pathway that makes it easier for job seekers to pursue a
career in the entertainment industry, and ensure California has a trained and diverse
workforce pipeline to support the entertainment industry. The pilot program may serve as a
model for the creation of similar statewide programs.
Year one of the pilot Career Pathways Program was faced with layers of challenges in
funding, recruitment, and training logistics as a result of the COVID-19 Pandemic. Despite
these challenges, the program was able to serve 55 students in its first year. A summary of
two of the training partner organizations’ participation in year one of the Career Pathways
program, administered by the IATSE Training Trust Fund, the fiscal agent for the program,
appears below:
ManifestWorks
There were two tracks of participants from ManifestWorks in year one of the program. The
first track were 12 alumni from the ManifestWorks main program. In December of 2020, these
12 participants were accepted as Y-16a: Production Sound/Video Trainees at IATSE Local 695.
The Y-16a classification afforded trainees the opportunity to gain paid apprentice positions
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 20
before being included on the Industry Experience Roster. The IATSE Training Trust Fund also
provided trainees with LinkedIn Learning and AVIXA accounts. As of December of 2020, 11 of
the 12 trainees were employed on contracts that ranged from 1-8 months, and were earning
wages that ranged from $19.05 to $29.00 per hour. Ten of these trainees are now IATSE
members of Local 695.
The second track of 25 participants from ManifestWorks completed the main program in
spring 2021. This 12-week Set Production Assistant Training Program includes life skills and on-
set training, as well as networking skills. ManifestWorks also provides mental health and other
support services to their participants, and in doing so keeps a record of other metrics that
illustrate the challenges facing their participants. In the 25 spring cohort, 16 were formerly
incarcerated, five are currently in transitional housing, and three have experienced
homelessness. Two of the participants have disabilities and one has a history with the
military. Twenty-four of the
spring ManifestWorks
participants are currently
working in TV/Film production.
The Brotherhood Crusade
The first cohort of CFC Pilot Career Pathways Program with The Brotherhood Crusade began
in March 2021. Twenty-one participants began in the
spring cohort, however three dropped out of the
program soon thereafter. The cohort began a
unique Life Skills course tailored specifically for the
Pilot Career Pathways Program participants. Of the
18 remaining participants, eight enrolled in courses
with Hollywood CPR.
Overall Year 1 Participant Information
Before the pandemic, it was estimated that the CFC Pilot Career Pathways Program would
serve approximately 150 participants in its first year. In year one of the program, the
ManifestWorks and The Brotherhood Crusade/Hollywood CPR cohorts served 55 participants.
All training and classes were held remotely due to the pandemic.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 21
DIVERSITY INITIATIVES
With Program 3.0, all approved projects must submit the company’s initiatives and programs
to increase the representation of women and minorities. The Diversity Initiative statement
must include a description of what the program is designed to accomplish and information
about how the program is publicized to interested parties. Diversity submissions have fallen
under one or more of these categories: directing, writing, casting, and production. Company
statements are reflective of a desire to see diversity improved among above and below-the-
line personnel within the entertainment industry and agree to adopt measures to ensure a
diverse applicant pool. The chart below shows samples of initiatives submitted to the CFC
from approved projects under year one of Program 3.0; a comprehensive list is on the CFC
website.
SAMPLE STATEMENTS: DIVERSITY INTIATIVES
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 22
INFRASTRUCTURE USAGE & GROWTH
According to FilmLA, application activity for permits jumped 45% in March 2021 compared to
February 2021 and leasing of soundstages is expected to soar.
3
A significant issue currently
confronting feature and television projects wishing to film in California and the Los Angeles
region is a shortage of stage space. Between increased demand for content with the
proliferation of streaming services
4
, and the fact that some companies reserve soundstages
even when they are not actually filming
5
, there is a substantial boom in creating additional
stage space. Far more cost-effective than building new stages from the ground up, an
increasingly popular practice within the industry is to take an existing space, such as a
warehouse, and re-purpose it.
6
Quixote North Valley Studios, opened in Pacoima in 2019, has five stages totaling
approximately 75,000 square feet. LA North Studios’ second and third Santa Clarita-based
facilities, added another stage of approximately 8,000 square feet at the second facility in
2020, and two at 44,250 and 55,750 square feet at their third facility, which opened in March
2021. Several other sound stages are currently in development with projected opening dates
through 2025.
Local Soundstage Developments
Name, Location
# of
Stages
Estimated
Square Feet
Opening
Date
Notes
8
th
and Alameda Studios
Downtown Los Angeles
17
300,000
2024
26-acre property in downtown LA, LA
Times printing facility; subject to city
approval.
7
Blackhall Studios
Santa Clarita
Up to
20
500,000
Mid-2024
Purpose-built facility on a 50-acre
parcel.
8
Echelon Studios
Hollywood
4
76,000
2025
Formerly Sears, 5-acre property.
9 .10
Jesse Street Studios
Los Angeles
4
TBD
TBD
East Los Angeles.
11
Sunset Glenoaks
Sun Valley
TBD
240,000
2023
A total investment of $170-190 million
by Hudson Pacific Properties and
Blackstone.
12
Television City TVC 2050
West Hollywood
8+
TBD
TBD
With an investment of $1.25 billion,
owner Hackman Capital plans to add
up to 1.3 million sq. ft. of total space
for total of 15 stages.
4
Quixote Studios
Hollywood
1
9,400
May 2021
Adaptive reuse of a warehouse.
5
Pacoima
4
80,000
April 2022
Adaptive reuse of a warehouse.
5
Sylmar
2
50,800
Soon
Adaptive reuse of a warehouse.
5
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 23
LOST PRODUCTIONS
The CFC conducted a detailed analysis of projects that applied for California film and
television tax credits in fiscal year 2020-2021 but ultimately did not receive tax credits.
Though the state has retained much production as a result of Tax Credit Programs 1.0 and 2.0,
data consistently shows that a large number of those projects not awarded ended up filming
outside of California, compared to those that remained in the Golden State.
Fiscal Year 2020-2021: Lost Productions
Inside California Outside California
$60,085,000
18%
$265,661,000
82%
Surveyed projects which responded that ultimately filmed in California without receiving tax
credits generated $60 million in the state. Taking advantage of California’s skilled cast and
crew, independent projects account for 72% of the projects that remained in California. With
bigger and more flexible budgets and schedules, non-independent feature films and TV
series were more apt to leave for jurisdictions outside California. These runaway projects
accounted for $266 million in production spending - a loss to the state’s below-the-line
production workers and the ancillary businesses that rely on the film and television
production industry. For example, a $140 million budgeted television series which applied but
did not get tax credits, filmed in New York. A $28 million budgeted non-independent feature
film that had hoped to film in California selected to shoot in New Mexico where tax credits
were available.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 24
As Program 3.0 progresses, the CFC will continue to collect further lost productions data. The
above data represents solely projects that applied during year one of Program 3.0. (See
Appendix D for Program 2.0 lost productions data.) The CFC is unable to track projects that
do not apply for California’s film and television tax credits or that are ineligible; thus, total
runaway production losses are presumed to be substantially higher.
GLOBAL COMPETITION
Although there are films and television projects produced without the benefit of tax credits,
the availability of incentives is a key factor when it comes to where projects are filmed. For
several years, the business model for feature film and scripted television production has
relied heavily on tax incentives to manage production costs. In addition, booming
infrastructure and other jurisdictions’ production and post-production incentives have
increased regional and global competition.
Competing Factor: Tax Incentives
Financing for projects by independent production companies incorporates the monetization
of tax credits (selling tax credits to third parties) as a key part of the financing structure. Non‐
independent (studio) productions factor in tax incentives heavily when considering
production locations, creating multiple budget comparisons to calculate net costs and
savings realized by virtue of tax credits. In addition to international competition from
Canada, Australia, the United Kingdom (U.K.), and most European Union nations, nearly 40 U.S.
states offer financial incentives to lure production and post‐production jobs and spending
from California.
Incentive‐rich jurisdictions such as New York, Louisiana, Massachusetts, Georgia, Toronto, and
Hungary seem committed to growing their foothold as top‐notch film and television
production centers. Once incentives take root in other states and countries, those locales, in
turn, develop long‐term infrastructure with stage construction, post‐production facilities, and
job training programs. These top competitors have built impressive multi‐studio facilities
over the past few years. Many of these jurisdictions have instituted job training programs as
well. While production companies will often relocate their relatively small creative teams
(producers, actors, directors, writers) to another state for the duration of a film shoot, very few
“below‐the‐ line” crew members (e.g., camera technicians, grips, electricians, carpenters,
make‐up artists, prop masters, drivers) from California are hired due to the additional
expense for travel and housing. The few that work on‐location out‐of‐state pay income tax in
the work state. (California receives only the differential in taxes owed based on the in‐state
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 25
versus out of state tax rate.) Furthermore, skilled California crew members end up training
the local workforce. This process helps create a growing pool of skilled local crews across
Tax Incentives: Georgia, Louisiana, New Mexico, New York
Source: Motion Picture Association
1
the country and around the world. Some film industry workers who cannot find work in
California have relocated their families to incentive states, resulting in lost tax revenue
and a steadily decreasing pool of skilled labor. Despite the success of California’s film
and television tax credit programs, the state has lost productions as competing states
that offer incentives achieve dramatic growth in production spending. In 2020 alone,
productions in Georgia, Louisiana, New Mexico, and New York spent $18 billion in motion
picture and television production - - a significant economic loss to California. More than
300 film and television projects hired 167,000 cast and crew in these jurisdictions.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 26
2020 Regional Economic Impact
Georgia
Louisiana
New Mexico
New York
Entertainment-related wages in the
state:
$3.8 Billion
$660 Million
$280 Million
$13.1 Billion
Entertainment industry jobs in the
state:
45,830
11,670
4,990
107,730
Jobs related to production:
19,300
5,430
2,550
54,590
Jobs related to distributing movies, TV,
and other video content to consumers:
26,520
6,240
2,430
53,140
Jobs including direct and indirect
impact on local vendors and other
businesses:
159,070
25,210
10,340
290,990
Films Produced in 2020
26
8
17
40
TV Series Produced in 2020
81
19
12
143
Source: Motion Picture Association
1
Competing Factor: Infrastructure
Various jurisdictions, both regionally and globally, boosted construction of new sound-
stages to provide a competitive edge. New York, Georgia, Oklahoma, and Washington
state have built or renovated soundstages with more than 250,000 square feet between
December 2020 and to June 2021. In Canada, several soundstages in Toronto,
Vancouver, and Calgary are being built or retrofitted this year to expand existing
production space. Croatia, Iceland, Ireland, Italy, Scotland, and Spain join the United
Kingdom in developing and renovating several soundstages between 2021 and 2022 to
entice filmmakers to produce projects throughout Europe. In addition, millions of dollars
are earmarked for new soundstage construction in Australia and New Zealand.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 27
Infrastructure Growth: United States
Infrastructure Growth: Canada
Infrastructure Growth: London
New York
•Kaufman Astoria Studios opened in December 2020. Two new large construction facilities are also in
the works. Source: New York Times
Georgia
•Tyler Perry purchased an additional 37.5 acres in Atlanta to build an entertainment unit. Source: The
Hollywood Reporter
•Savannah College of Art and Design (SCAD) is opening a Hollywood-style backlot and a state-of-the-
art XR stage for virtual production. Source: Savannah Now
Oklahoma
•In 2021, Prairie Surf launched Prairie Surf Studios in downtown Oklahoma City, with five soundstages
totaling 138,000 square feet. Source: Variety and Prairie Surf
Washington
•A a $1.5 million county project to renovate what was once the Fisher Flour Mill on Harbor Island into a
state of the art 117,000 square foot soundstage. Source: King5 NBC News Seattle
Toronto
•Plans to turn 8.9 acres of land on the waterfront into a 500,000-square-foot film studio near Pinewood
Toronto Studios, which is also building another 200,000 square feet of new soundstages and support
space. Source: The Hollywood Reporter
Vancouver
•Martini Film Studios is building a 600,000 sq. ft. facility to include 300,000 sq. ft. of new soundstages
and 300,000 sq. ft. of production support space for wardrobe, workshops and offices. Source: The
Hollywood Reporter
Calgary
•Fortress Studio in southeast Calgary targets Hollywood tentpole movie or series production as it offers
97,500 square feet of stage space with a clear height of 36 feet on around 12 acres in the city’s
downtown core. And nearby Fortress Support offers another 70,000 square feet of support space and
around 20,000 square feet in office space. Source: The Hollywood Reporter
•William F. White International, expanding in Calgary and soon into Winnipeg with two purpose-built
stages and one retrofit stage originals. Source: The Hollywood Reporter
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 28
Shinfield Studios
•Reading. 18 new soundstages in a 45,000 sq.ft. studio complex. Source: Shinfield Studios
Ashford International Film
Studios
•Kent. 80,000 square feet of film studios, with 240,000 sq.ft. of production space. Source: Deadline
Dagenham Eastbrook
•East London. Twelve sound stages totalling 140,000 sq.ft. Source: Hackman Capital
The Wharf
•Barking. Six new stages near Dagenham Eastbrook Studios, see above. Source: Hackman Capital
Sky Studios
•Elstree Hertfordshire. Set to open in 2022 with 14 new soundstages. Source: Elstree Studios
London Films Studios
(SHL)
•Enfield. Three stages. Source: London Film Studios
Raynham Hanger Studios
•Norfolk. Expansion plans are ongoing. Source: The Studio Map
Stratford
•London. TV studios, five studios plus two green screen studios. Source: The Studio Map
Mercian Studios
•Birmingham. Film & TV studios, six stages. Source: The Studio Map
The Depot
•Liverpool. 2 x 20,000 sq ft units, operational by Summer 2021. Source: The Studio Map
Littlewoods Studios
•Liverpool. Film & TV studios under the Twickenham Studios brand. Source: The Studio Map
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 29
Infrastructure Growth: Europe
Infrastructure Growth: Australia and New Zealand
Iceland
•Converted from a building that used to be a fertilizer plant, the roughly 8,000-m2 (86,000-sq ft) studio
is one of Europe’s largest. Source: Iceland Monitor
Ireland
•Recent developments such as the greenlighting of a new €150 million Studio Space and Media
Campus in Greystones, Co. Wicklow will effectively double Ireland’s studio space. Source: Irish Film and
Television Network
Italy
•Apulia Studios launched in 2021, converting a former aquatic theme park into 9 soundstages with two
water tanks. Source: Mia Market Italy
Scotland
•Scotland is to get a new film and TV studio in Glasgow's west end under an £11.9 million plan to
transform part of the historic Kelvin Hall into a new 10,000 sq ft studio facility. Source: The Scotsman
•New film studio to open in Edinburgh, after 85 years! Source: The Scotsman
Spain
•Secuoya will be the crown jewel of filming locations in Europe. Currently has 5 stages - will have 5
more open in 2022. Source: KFTV
Australia
•Russell Crowe has announced plans to back a new film studio in Australia’s Coffs Harbour, situated on
the country’s New South Wales Mid North Coast. The state-of-the-art facility, with an estimated value
of $438M, will be constructed on a sprawling pre-existing Pacific Bay resort complex and will integrate
production, post-production and accommodation and amenities. Source: Deadline
New Zealand
•Plans for a multi-million dollar film studio to be built on the south island of New Zealand have been
submitted to Christchurch City Council. Source: KFTV
•The vast TEMPLE FILM STUDIOS complex will be constructed on an old hospital site in Templeton, just
outside Christchurch and will include eight 25,402 square feet studios measuring between 42.4 to 45.9
feet, a wet stage and offices and workshops. There will also be a backlot for temporary film and video
sets. Source: KFTV
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 30
Competing Factor: Visual Effects (VFX)
Global viewers are consuming more immersive content on their ultra-high-definition TVs,
smartphones, and tablets via a myriad of platforms, including Netflix, Amazon, Hulu,
AppleTV+, Paramount +, Peacock, and Twitch, as well as YouTube, Twitter, and Facebook.
Streaming video is the fastest growing distribution channel for animation and is witnessing
double digit growth which can be attributed to the exponential growth in the number of
online video viewers throughout the world.
11
With studios including more animation and VFX
shots, moviegoers are demanding high quality productions with engaging visual effects and
realistic animation.
Many states and countries have enacted incentives that specifically target the visual effects
industry. In the United States, New York State offers a 30% tax credit for visual effects and
post-production work. In Canada, British Columbia, and Quebec each provide a 16% credit
on visual effects work produced in these provinces ‐ both of which are in addition to their
provincial (28% and 20%, respectively) and federal tax breaks of 16%. In turn, many visual
effects companies of all sizes have relocated to Vancouver, Canada ‐ taking high‐wage jobs
with them.
According to a 2019 study, the field of visual effects has accounted for the most significant
increase in jobs in the motion picture industry over the last 20 years. In 2018, visual effects
crewmembers were hired four times more compared to other crewmembers.
13
When
surveyed, VFX executives at studios and production companies told the CFC that the most
important factor they consider when awarding VFX contracts is tax incentives. The California
Tax Credit Program offers an additional 5% tax credit for VFX work, bringing the credit up to
25% for projects in the program. Even with a 25% tax credit, many projects in the program
choose to go to other locales with more generous VFX incentives. Program 2.0 projects, such
as
Call of the Wild, A Wrinkle in Time, Bumblebee, Ad Astra
, and
Captain Marvel
, spent millions
of dollars out of California for visual effects; in aggregate, Program 2.0 projects spent nearly
the same outside the state ($205 million) as they did inside the state ($235 million) for
VFX, indicating the 25% incentive is not enough to keep the work in California. It also may
indicate that due to the lack of competitive incentives, the visual effects infrastructure that
once existed in the state is no longer enough to support large visual effects projects. Tax
credit projects are but a tiny fraction of projects that film in the state, so most projects have
no incentives available to them when considering where to contract their VFX work. California
is the only major film production center that does not specifically target VFX jobs, and as a
result, much of this ever-expanding and in-demand industry has left the state.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 31
CALIFORNIA SOUNDSTAGE FILMING TAX CREDIT
PROGRAM
In July 2021, Governor Gavin Newsom signed SB 144 which created a new tax credit program,
incentivizing projects that film in new or renovated soundstages as certified by the CFC.
The new program has $150 Million in tax credits to allocate on a first-come-first-served basis.
In order to be eligible as a qualified production entity to receive tax credits under the
California Soundstage Filming Tax Credit Program, a production entity may qualify if the
project films within three years from the date of CFC certification of the soundstage. In
addition, the production entity must film at least 50% of its principal photography stage
shooting days at a certified soundstage. The production entity, in addition, must own more
than 50% of the certified soundstage where the production is filmed or enter into a contract
or lease for 10 years with the owners of the certified studio construction project where the
production is filmed.
July 21, 2021: Governor Newsom at SB 144 bill signing with (from left) Senator Maria Elana Durazo (representing Senate District 24), Assemblymember
Wendy Carrillo (representing Assembly District 51), Sunset Gower Studios CEO Victor Coleman, Senator Anthony Portantino (representing Senate
District 52), CFC Executive Director Colleen Bell, and Assemblymember Autumn Burke (representing Assembly District 62).
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 32
Once a construction or renovation project meets a set of certification criteria as defined by
the CFC, the taxpayer may be eligible to receive tax credits. Actual construction or renovation
expenditures must be at least $25 million for construction or renovations made within five
continuous years. Additional requirements under the new bill include submission of a
diversity workplan.
The diversity workplan is required documentation submitted by the applicant indicating
diversity goals, including race and gender, when hiring above- and below-the-line
individuals. The workplan should broadly reflect California’s diversity make-up in terms of
race and gender. The CFC is in the process of creating guidelines and will have the authority
to audit final diversity reports.
As a Soundstage Filming Tax Credit project, applicants are eligible to receive additional tax
credits after successfully achieving the goals as stated in the diversity workplan. Verified by
the CFC, if the applicant has met or made a good faith effort to meet the diversity goals of
the workforce employed, the project may be eligible for up to an additional 4% tax credit.
The payment requirement from an approved Certified Studio Construction Project to fulfill the
Career Pathways Training Program, as described in the Career Pathways Training Program
section, has been modified under SB 144. The approved applicant filming on a certified
soundstage is required to pay 0.5% (up from .25%) of the approved tax credit amount.
As approved Soundstage Filming Tax Credit projects, recurring TV Series are capped to
receive $12 million in tax credits per season, while feature films are capped at $12 million in tax
credits.
CONCLUSION
The California Film Commission (CFC) has been administering the state’s film and television
tax credit programs since 2009, growing from a yearly $100 million lottery-based program to
a $330 million per year program based on a jobs ratio (jobs creation) system. Last year alone,
the CFC reserved $336 million in tax credits for an estimated return of $1.6 billion in spending
across California. Despite the programs’ success at retaining many productions and
stimulating the economy, there is growing pressure to compete globally with more film tax
incentives, job training and infrastructure.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 33
California must continue to invest in a skilled workforce and train individuals for jobs in the
industry, and jobs must be accessible to a diverse pool of individuals. The Pilot Career
Pathways program is working to provide such opportunities to individuals from underserved
communities, as are many other diversity initiatives from studios and production
companies. The Career Readiness Initiative, as well as partnerships with the California
Department of Education and the CFC, assists teachers and students in gaining exposure and
experience in the industry. SB144, with its diversity component, is another avenue in which the
program encourages the hiring of individuals from underrepresented communities. With
Arts/Media/Entertainment as the largest sector of Career Technical Education training in the
state, it’s clear that California’s youth are very interested in careers in this industry. It is vital
that the state continue its efforts to incentivize productions and support training programs
and infrastructure growth so that a skilled workforce can support a robust entertainment
community for years to come.
With the advent of virtual production and increased demand for visual effects, California has
the potential to gain thousands of jobs in this sector. However, with the abundance of visual
effects incentive programs offered by many other locales, California’s market share of visual
effects work has steadily declined. As the only major industry hub without a stand-alone
visual effects tax credit, California is missing the opportunity to increase employment in this
sector of film production and post-production.
The ever-increasing demand for content needed to feed streaming services has created
even larger film and TV production hubs worldwide. In order for California to retain its edge
as the entertainment capital of the world, additional stages are needed to accommodate the
demand. The passage of SB144 is intended to encourage content providers to invest in
soundstages to produce their projects.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 34
SOURCES
1. Motion Picture Association https://www.motionpictures.org/what-we-do/driving-economic-growth/
2. California Department of Education - Arts, Media, and Entertainment Industry Sector
https://www.cde.ca.gov/ci/ct/gi/ameindustrysector.asp
3. Commercial Observer https://commercialobserver.com/2021/06/la-jesse-street-studios-sound-stage-270k-sf-
office-development-filming/
4. FilmLA Soundstage Report https://www.filmla.com/filmla-updates-annual-sound-stage-production-report/
5. Phone Conversation with Cheryl Huggins Sr. VP of Quixote Studios (June 16, 2021)
6. Commercial Observer https://commercialobserver.com/2021/05/la-quixote-studios-filming-soundstages-
hollywood-san-fernando-development-streaming/
7. Los Angeles Times https://enewspaper.latimes.com/desktop/latimes/default.aspx?pubid=50435180-e58e-
48b5-8e0c-236bf740270e&edid=4b344ff6-98c4-4e36-a413-eba04271e33d&pnum=10
8. City of Santa Clarita https://www.santa-
clarita.com/home/showpublisheddocument/19892/637623647073200000
9. Urbanize Los Angeles https://urbanize.city/la/post/hollywood-bardas-bain-capital-echelon-studios
10. Los Angeles Times https://enewspaper.latimes.com/desktop/latimes/default.aspx?pubid=50435180-e58e-
48b5-8e0c-236bf740270e&edid=060e72aa-b640-4d09-abf5-78f20f6fff30&pnum=8
11. Commercial Observer https://commercialobserver.com/2021/06/la-jesse-street-studios-sound-stage-270k-sf-
office-development-filming/
12. Globe St. https://www.globest.com/2021/07/30/hudson-pacific-blackstone-plan-studio-project-in-sun-valley/
13. Stephen Follows: Film Data and Education https://stephenfollows.com/which-film-jobs-are-increasing-and-
which-are-decreasing/
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 35
APPENDIX A | Enacting Legislation
• SB 144 (Portantino). Taxes: credits: qualified motion pictures: certified studio construction projects:
reports. The Personal Income Tax Law and the Corporation Tax Law allow various credits against
the taxes imposed by those laws, including a motion picture credit 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, 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.
• SB 878 (Senate Committee on the Budget and Fiscal Review), Existing law allows credits under the
Personal Income Tax Law and the Corporation Tax Law for taxable years beginning on or after or
after January 1, 2016, to be allocated by the California Film Commission on or after July 1, 2015, and
before July 1, 2020,
• AB1839 (Gatto) was enacted in September 2014 creating a new Film and Television Tax Credit
Program for five years and authorized funding at $230 million in FY 2015-16 and $330 million for each
of the next four years. It expanded eligibility to include all 1-hour scripted television series regardless
of distribution outlet (network, premium cable, internet, TV, etc.), big-budget feature films (but
restricted credits to the first $100 million in qualified expenditures), and television pilots.
• SB1197 (Calderon), identical to AB2026, was enacted in September 2012 to provide a two-year
extension to the California Film & Television Tax Credit Program through FY 2016-17. The bill sought
a five-year extension but was reduced to a two-year bill in the Senate.
• AB2026 (Fuentes) was enacted in September 2012 to provide a two-year extension to the California
Film & Television Tax Credit Program through FY 2016-17. The bill sought a five-year extension but
was reduced to a two-year bill in the Senate.
• AB1069 (Fuentes) was enacted in October 2011 to provide a one-year extension to the California Film
& Television Tax Credit Program through FY 2014-15. The original bill sought a five-year extension
but was reduced to one-year in the Senate.
• SB X3 15 (Calderon) / ABX3 15 (Krekorian) was enacted in 2009 to create the California Film and
Television Tax Credit Program, which provided a five-year, $500 million tax credit to be
administered by the CFC.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 36
APPENDIX B | Program 3.0 vs. 2.0 Comparison Chart
Sunset Date
June 30, 2020
June 30, 2025
Funding
$330M per Fiscal Year
No change.
Funding Categories
• 40% TV Series, Pilots, Mini-series,
MOWs
• 35% Non-independent Films
• 20% Relocating TV Series
• 5% Independent Films
• 40% TV Series, Pilots, Mini-Series
• 35% Non-independent Films
• 17% Relocating TV Series
• 8% Independent Films
Independent film funding split
between projects with budgets
under $10m and over $10m.
•
Tax Credit Allocation
Percentage
• 25% Indies and Relocating TV
• 20% Non-Indies
• Additional 5% “Uplift”
• Filming Outside 30-Mile Zone
• Visual Effects Expenditures
• Music Scoring / Track
Recording Expenditures
• 25% Indies and Relocating TV
• 20% Non-Indies
• Additional 5% “Uplift”
• Filming Outside 30-Mile Zone
• Visual Effects Expenditures
• Eliminates 5% for Music Scoring /
Track Recording
• 5% or 10% Additional for Local
Hires Working Out-of-Zone
Application Selection
Jobs ratio ranking within specific
categories.
Jobs ratio ranking within specific
categories; allows VFX vendor
payments split 70% wage/30%
non-wage.
Career Readiness
Requirement
Paid internship positions for a
minimum of 75 hours each or a
combination of internships with a
minimum 225 hours in
total. Payments to career readiness
interns are not qualified. Workshops /
panels must be at a minimum of
eight (8) hours in length.
Paid internship positions for a
minimum of 100 hours each or a
combination of internships with a
minimum 300 hours in
total. Payments to career readiness
interns are considered qualified
wages. The 8-hour minimum
requirement for workshops / panels
is eliminated.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 37
Pilot Career Pathways
Training Program
None.
Pilot skills training program for
individuals from underserved
communities for careers in
entertainment industry; fee of .25%
of estimated tax credit to be paid
within 10 business days of program
acceptance.
Deadline to Begin Filming
180-day Rule: Productions must
begin filming within 180 days of credit
allocation letter.
180-day Rule: Productions must
begin filming within 180 days of
credit allocation letter; for projects
with qualified budgets over $100M,
must begin filming within 240 days.
Penalty for
Overstatement of Jobs
Ratio
Different penalties for Non-
Independent and Independents.
Same penalty for Non-Independent
and Independents.
Bonus Points
Include facility usage as bonus point
factor.
• Eliminate facility usage as bonus
point factor.
• Add music scoring/track
recording wages as bonus point
factor.
Carry Forward
Taxpayer may carry forward tax
credit for 5 years.
Taxpayer may carry forward tax
credit for 8 years.
Recurring TV – Pick-up
Orders
Relocating TV Eligibility
No time limit as to when recurring TV
series can submit pick-up orders.
Must have filmed most recent
season outside of CA.
Maximum 140 calendar days from
date a credit allocation letter would
have been issued to submit pick-
up order.
Must have filmed at least 75% of
most recent season outside of CA.
Movies of the Week
Eligible type of production.
Omit Movie-of-the-Week; this
production type may apply in
Independent Film or Feature Film
category.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 38
Unallocated Credits
After sunset date, CFC may not
allocate unused credits.
• CFC may allocate unused credits
from Programs 1.0 and 2.0.
• After sunset date of 3.0, CFC may
continue to allocate unused
credits from all 3 programs.
Anti-Harassment
Provision
None.
Requires approved applicants to
provide their written policy against
unlawful harassment which
includes procedures for reporting
and investigating harassment
claims. Applicants shall indicate
how policy will be distributed to
employees and include education
training resources and remedies
available.
Diversity Reporting
Requires approved applicants to
provide statistics on the diversity of
the workforce employed.
A summary of the applicant’s
voluntary programs to increase the
representation of women and
minorities including a description of
what the program is designed to
accomplish and information about
how the programs are publicized to
interested parties. This
requirement is waived for
independent films with qualified
expenditures of ten million dollars
($10,000,000) or less.
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 39
APPENDIX C | Tax Credit Usage Limitations
In July 2020, Governor Gavin Newsom imposed new tax regulations to offset the California budget deficit as a
result of the Covid-19 pandemic (see page 42 for Covid-19 effects on California film and television productions).
For the period beginning January 1, 2020 and before January 1, 2023, Non-Independent tax credit recipients are
limited to a cap of $5 million with respect to offsetting state income tax liability and a $5 million cap with respect
to offsetting Sales and Use tax liability. This applies to projects in both Program 2.0 and Program 3.0 tax credit
programs. The cap on credits against income tax liability are at the combined reporting group level; the cap on
credits against Sales and Use tax liability can be claimed by affiliates. Independent Films are also limited to the
$5 million tax credit limitation for the next 3 years. Companies which purchase tax credits from Independent Films
have the same limitations when they elect to utilize their credits against their state income tax liability.
Qualified taxpayers, participating in the California Film & TV Tax Credit Program, or their affiliates are allowed a
credit against the net tax in the amount specified on the Tax Credit Certificate. Tax Credits are governed by the
year the credit certificate is issued. Once a taxpayer receives a Credit Certificate, they can claim it on their tax
return beginning with the year the Certificate was issued. The excess credit may be carried over to reduce the
net tax in the following taxable year and succeeding five (Program 2.0) or eight (Program 3.0), if necessary. This
means that for Program 2.0, the carryover may be extended to six years and Program 3.0 to nine years. Due to
the $5 million per year limitation the first three years of Program 3.0, the carryover may be extended from six to
nine years (2.0) and from nine to twelve years (3.0). The extension of the carryover period is only for the
number of years that the credit was limited. For example, if a taxpayer has a Program 2.0 credit for $15 million
that they are eligible to utilize in 2022, the taxpayer would be limited for only one year. Therefore, the credit
would be allowed an additional year of carryover.
Tax credits may be assigned to one or more affiliates. Affiliate Corporation is defined in the Revenue & Taxation
code as a corporation that is a member of a commonly controlled group as defined in Section 25110 subdivision
(b). Qualified Taxpayers may elect to split the credits and apply a portion to their income tax liability and a
portion to their Sales & Use, however, only one Credit Certificate will be issued to the taxpayer. There is no
recapture provision for any Tax Credit Certificates issued. Productions must retain all records pertinent to the
Credit Certificate for a minimum of three years from the date of filing their tax return claiming the credit. If a
limited liability company (LLC) elects to be taxed as a partnership or “S” corporation, the LLC is treated as a
passthrough entity. In the case of any pass-through entity, the determination of whether a taxpayer is a qualified
taxpayer is made at the entity level. No amount of credit is allowed to the pass-through entity. The credit is
passed through to the partners, members, or shareholders.
Special Note
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 40
APPENDIX D | Program 2.0 Summary
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 41
APPENDIX D | Program 2.0 Summary (cont.)
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 42
APPENDIX D | Program 2.0 Summary (cont.)
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 43
APPENDIX E | Program 1.0 Summary
Table 1. Aggregate Summary
Table 2. Relocating TV Series
Table 3. Lost Productions Data
1
2009-10
2010-11
153,615,000$ 1,230,290,000$ 454,942,000$ 321,190,000$ 454,158,000$ 4,676 8,982 114,297
2
2011-12
95,094,000$ 830,863,000$ 272,461,000$ 196,728,000$ 361,629,000$ 3,652 7,382 73,036
3
2012-13
68,838,000$ 602,107,000$ 185,454,000$ 136,688,000$ 279,965,000$ 3,477 5,946 56,166
4
2013-14
96,582,000$ 770,545,000$ 264,638,000$ 188,977,000$ 312,775,000$ 3,528 7,039 77,236
5
2014-15
86,251,000$ 697,700,000$ 246,322,000$ 173,950,000$ 275,415,000$ 3,653 6,542 73,657
6
2015-16
74,701,000$ 534,845,000$ 225,550,000$ 141,460,000$ 167,601,000$ 2,993 3,957 45,014
7
2016-17
70,838,000$ 547,600,000$ 201,372,000$ 124,366,000$ 197,546,000$ 2,480 3,101 51,439
645,919,000$ 5,213,950,000$ 1,850,739,000$ 1,283,359,000$ 2,049,089,000$ 24,459 42,949 490,845
# of Cast
# of
Crew
# of
Extras
Aggregate All
Years
Program 1.0 Years 1 - 7 Aggregate Summary
Program
Year
FY
Funding
Estimated Tax
Credit Allocation
Estimated Direct
Spending
Qualified Wages
Qualified Non-Wage
Expenditures
Non-Qualified
Expenditures
Title
Previous
Location
Seasons
in CA
Qualified Wages
for All Seasons
in CA
Qualified Non-
Wages for All
Seasons in CA
Total CA
Expenditures for
All Seasons in CA
Total Credit
Allocation for
All Seasons in
CA
Body of Proof RI 2 41,728,000$ 22,760,000$ 95,809,000$ 16,122,000$
Important Things w/ Demetri Martin NY 1 3,476,000$ 2,104,000$ 6,432,000$ 1,340,000$
Teen Wolf GA 4 93,144,000$ 48,776,000$ 197,597,000$ 35,157,000$
Torchwood U.K. 1 13,745,000$ 9,942,000$ 34,781,000$ 5,700,000$
TOTAL 152,093,000$ 83,582,000$ 334,619,000$ 58,319,000$
Program 1.0 Relocating Television Series
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 44
APPENDIX E | Program 1.0 Summary (Continued)
Table 4. Regional Filming Impact
Program 1.0 - Local Spend Outside City of Los Angeles 30-mile zone
County
Total Local
Spending
Project Title
Alameda
$4,447,000
Hemingway & Gellhorn, Moneyball
Humboldt
$855,000
Swiss Army Man, Woodshock
Imperial
$817,000
American Sniper, Last Days in the Desert
Kern
$327,000
The Congress, Faster, Justified, In Your Pocket, Priest
Nevada
$16,000
Her
Orange
$190,000
J. Edgar, Jackass, Look of Love, Saving Mr. Banks
Placer
$65,000
Jackass
Riverside
$621,000
Behind the Candelabra, Billion Dollar Movie, The Gambler, Knight of Cups
San Bernardino
$1,500,000
American Sniper, Argo, Her, Hirokin, Hit the Floor, Jackass, Priest
San Diego
$19,000,000
Indwelling: Return of the Saint, Last Days in the Desert, Paranormal Activity:
The Marked Ones, Terriers
San Francisco
$16,000,000
Hemingway & Gellhorn, Knife Fight, Murder in the First, Nine Lives of Chloe
King, Please Stand By
San Luis Obispo
$68,000
Jackass
San Mateo
$1,800,000
Chasing Mavericks, Swiss Army Man
Santa Barbara
$410,000
No Strings Attached, Rites of Passage
Ventura
$6,500,000
Jackass, Justified, Super 8, Water for Elephants, We Bought a Zoo
Total
$52,616,000
California Film Commission | Film and TV Tax Credit Program Progress Report
November 2021 | Page 45
APPENDIX F | Local California Film Incentives
City of Los Angeles
❖ Provides free use of most available, city-owned locations for filming.
❖ Reduced business tax rates for entertainment productions.
❖ Special tax breaks for entertainment creative talent.
More Info: https://ewddlacity.com/index.php/entertainment-incentives
Riverside County
❖ Waives all film permit fees in unincorporated areas.
❖ Free use of County-owned properties for projects lasting 10 days or less.
❖ Waives transient occupancy tax (TOT) at participating hotels.
❖ Palm Springs offers a $5,000 grant available for qualified productions within the City of Palm Springs
❖ San Jacinto – waives film permit fees, with no location fees for filming on city-owned property.
More Info: http://filmriversidecounty.com/Incentives.aspx
City of San Francisco
❖ Offers a rebate program that refunds up to $600,000 on any fees paid to the City of San Francisco for
production of a scripted or unscripted television episode, feature length film, or documentary. The rebate
covers permit fees, payroll taxes, cost to pay up to four police officers per day, fees for city-owned
locations, stage space costs, street closure fees, and more.
❖ San Francisco also has a Vendor Discount Program, offering 10-30 percent off hotels, restaurants,
production services, car rentals, and a 5 percent discount on Virgin America, and a 5-13 percent discount
on United Airlines.
More Info: https://filmsf.org/incentives
Santa Barbara County
❖ Media Production Incentive Program provides a cash rebate for permit fees and 50 percent of affiliated
CHP, Sheriff, or PD costs to qualified still photo campaigns, commercials, unscripted and scripted television,
and feature film production. Program is capped at $50,000.
More Info: https://santabarbaraca.com/film-commission/production-resources/
City of Santa Clarita
❖ Offers a three-part film incentive program that refunds basic permit fees for locally based, recurring, and
California Film & Television Tax Credit Program-approved productions. Provides partial refunds of
Transient Occupancy Taxes (TOT).
More Info: http://filmsantaclarita.com/for-filmmakers/film-incentive-program/
Shasta County
❖ Shasta County is dedicated to serving the film industry. Qualifying productions can receive up to $50,000
through the local incentive program.
❖ The local incentive program is aimed at retaining and increasing feature and television production in
Shasta County by subsidizing permit fees, offering hotel rebates and direct spend incentives.
More Info: https://filmshasta.com/for-filmmakers/
