November 2019 | Page 4
California Film Commission
Film and Television Tax Credit Programs
EXECUTIVE SUMMARY
❖ Tax Credit Program Statistics
The first four fiscal years of Program 2.0 produced a substantial
economic impact. With an investment of $1.1 billion in tax
credit reservations, approved productions are on track to
generate nearly $8.4 billion in direct in-state spending. This
includes $3 billion in qualified wages to below-the-line crew
members, $2.6 billion in qualified vendor expenditures, and
another $2.8 billion in other expenditures which do not qualify
for tax credits. Collectively, these productions are hiring more
than 27,000 cast and 36,000 crew members, and 558,000
background performers (the latter figure measured in ‘man-
days’).
❖ Program 2.0 attracts big-budget films
Program 2.0 expanded eligibility to include projects with
budgets over $75 million. To date, Program 2.0 has
attracted 12 such big-budget feature films resulting in $1.5
billion in direct spending in California.
❖ Relocating TV Series
The establishment of separate (dedicated) funding categories
for different types of productions has enabled Program 2.0 to
attract 16 television series to relocate to California from out-of-
state. Projects have relocated from across the US (Florida,
Georgia, Louisiana, Maryland, New York, North Carolina and
Texas), Canada (Vancouver) and Ireland. Collectively, these
projects are contributing more than $1.6 billion in direct
spending in California, including nearly $553 million in qualified
wages.
❖ Summary of economic impact in counties outside of LA
Program 2.0 provisions grant added incentives for projects
filming outside the Los Angeles region. As a result, approved
productions have spent more than $130 million across 19
counties outside of Los Angeles. This report also includes a
brief overview of supplementary local/regional incentives
offered by cities and counties across California to attract film
and television production.
❖ Career Readiness Requirement
Program 2.0 mandates that all participating projects fulfill the
“Career Readiness” requirement. This report provides an
overview of the requirement and tracks how productions are
participating in career-based learning opportunities including
paid internships, faculty externships, classroom workshops,
professional skills tours, and donations.
❖ Summary of third-party data reveals job and
infrastructure growth
Members of California’s below-the-line unions working
in film and television have experienced substantial
growth in employment – including a 11.7 percent
increase in hours worked in the basic craft unions in
2018 compared to 2017. SAG-AFTRA reported a
significant increase in the number of in-state
entertainment background performer jobs, with a 30
percent increase in 2018 compared to 2014. California
is also benefiting from a surge in stage and production
support space construction while sound stages are
operating at near capacity.
❖ Analysis of projects that applied to Program 2.0, but were
denied due to insufficient availability of tax credits
While the state has retained much production as a result of
Program 2.0, many projects that apply are denied due to the
limited supply of tax credits. The CFC tracks the fate of those
projects that are subsequently produced without California tax
credits. Most of these projects are shot outside California in
jurisdictions where tax credits are available. From July 2015 to
June 2018, such ‘runaway’ projects accounted for nearly $3.4
billion in production spending outside California.
❖ Looking ahead to Program 3.0 provisions
In August 2018, the legislature enacted the third iteration of the
California Film and Television Tax Credit Program. Dubbed
Program 3.0, it is a five-year incentive that will go into effect in
July 2020 when Program 2.0 expires. This report includes a
comparison analysis of the changes between Program 2.0 and
Program 3.0. Upcoming changes include more funding for
independent productions, a new pilot skills training program that
targets underserved communities, and a requirement that
productions provide diversity initiatives as well as anti-
harassment policies.