Tax Guide for Film and Television

Understanding tax credit issues related to your business can be time-consuming and complicated. We understand this and want to help by providing the information you need. We have created this guide to help you understand a sales and use tax credit opportunity that potentially applies to your filmmaking business. This guide will help you apply for the tax credit and obtain a tax refund if you qualify.

Overview

If you own a business in California, and you expect to make sales, lease equipment, or purchase items from out of state, you must apply for a seller's permit or otherwise register with us. When you hold a seller's permit, you must file sales and use tax returns and pay any sales or use tax due on your sales and purchases. Whether you are a new filmmaker in California or growing your existing filmmaking business, you may be eligible for a tax credit that can be used to reduce the sales and use tax you owe.

Register with CDTFA

Online Registration—Register with us online for your seller's permit or add a business location to an existing account.

Filing and Payment

Tax Return Filing Deadlines—Find your filing due dates.

File a Tax Return Online—Use our online filing service, which is free!

Online Payment Options—Make payments online for tax and fee programs.

Notice of Business Change—Keep your information current by using this form to notify us of any business changes.

Film and Television Tax Credit Program

New Information: Beginning with fiscal year (FY) July 2025 through June 2030, the amount allocated to the California Film and Television Tax Credit Program will be increased to $750,000,000, except as otherwise provided.

For more information, see Assembly Bill 1138 (Stats. 2025, ch.27)

The California Film Commission (CFC) administers the Film and Television Tax Credit Program. This program provides tax credits based on qualified expenditures for qualified productions produced in California.

The first credit program provided $100,000,000 in tax credits to be allocated for each fiscal year from July 2009 through June 2015.
The second credit program was a five-year, $1.55 billion program that provided $230,000,000 in tax credits to be allocated for FY 2015–16 and $330,000,000 in credits to be allocated for each fiscal year from July 2016 through June 2020.
The third credit program provided $330,000,000 in tax credits for each fiscal year from July 2020 through June 2025.
The fourth credit program provided $750,000,000 in tax credits for each fiscal year from July 2025 through June 3030, except as otherwise provided.

The CFC allocates credits to applicants planning to produce qualified productions as defined in Regulation 1529, Motion Pictures. If you think you may qualify for this credit, contact the CFC for information. If interested, you must submit an application for proposed productions through the CFC's online application portal. Once an application is processed, the CFC will notify you if your production is eligible to receive credits. You may only use your allocated credits after your qualified production is completed and the CFC has verified your production's qualified expenditures and issued a credit certificate.

The current program offers tax credits to TV projects and feature films with several application periods each fiscal year. Each fiscal year (July 1 to June 30), the funding is categorized into the following project types: TV Projects, Relocating TV, Indie Features, and Non-Indie Features.

How to contact the CFC:

Telephone: 1-323-860-2960, extension 110
Website: www.film.ca.gov/tax-credit
Mail:
California Film Commission
Attn: California Film and Television Tax Credit Program
7080 Hollywood Boulevard Suite 900
Los Angeles CA 90028

General Information and Procedures

Who is a qualified taxpayer for the purpose of this credit?

You are a qualified taxpayer if you have been issued a certified Tax Credit Certificate by the CFC and have paid or incurred qualified expenditures as defined by RTC section 23698.1 (b)(17). A qualified taxpayer may also assign tax credits to one or more affiliated corporations.

What is an affiliated corporation?

An affiliated corporation, per Revenue and Taxation Code (RTC) sections 23685(c)(1) (first credit program), 23695(c)(1) (second credit program), , 23698(c)(1) (third credit program), and 23698.1(c)(1) (current credit program) includes:

A corporation that owns (directly or indirectly) 100 percent of the assignor's voting common stock,
A corporation in which the assignor owns (directly or indirectly) 100 percent of the voting common stock,
A corporation that is wholly owned by a corporation or individual owning 100 percent of the assignor's voting common stock, or
A corporation that is a stapled entity as defined in RTC section 25105.

How can a tax credit be used?

If you are a qualified taxpayer who has been issued a credit certificate by the CFC or if you are an affiliated corporation (affiliate) of a qualified taxpayer, the following information will help you use your credits.

A qualified taxpayer may apply the tax credits against its California franchise tax liability or California income tax liability or make an election to apply the tax credits to its California sales and use tax liability. An election to use all or part of the tax credits for sales and use taxes is irrevocable. Once this election is made, those credits may no longer be applied against any California franchise tax or income tax liability. For more information about the annual cap on the tax credit, see What is the annual cap on the tax Credit?
A qualified taxpayer may assign any portion of its unused credits to an affiliate. The affiliate may apply the tax credits against its franchise or income tax liability or may make an irrevocable election to apply the tax credits to its sales and use tax liability. Credits must be assigned on the qualified taxpayer's California franchise tax or income tax return before the affiliate may elect to use the credits against its sales and use tax liability.
An irrevocable election to apply tax credits against a sales and use tax liability must be filed on or before the date that the qualified taxpayer or affiliate would first be allowed to claim a credit on its California franchise tax or income tax return.
The California Franchise Tax Board (FTB) administers the rules for assigning credits and claiming credits for franchise and income tax purposes. You may find more information on the FTB's webpage, California Motion Picture and Television Production Credit.

How can a tax credit offset a sales and use tax liability?

Credits may only be applied against specified portions of the sales and use tax (RTC sections 6051, 6051.3, 6051.15, 6201, 6201.3, and 6201.15) which add up to a rate of:
- April 1, 2009, through June 30, 2011: 6 percent
- July 1, 2011, to present: 5 percent
No interest will be paid on any amount refunded or credited.

When can the tax credit be used for sales and use tax purposes?

Initial Refund Period

After the CFC issues the tax credit certificate for the qualified production, refunds are allowed for sales and use taxes a claimant paid during the period:

Beginning on the first day of the calendar quarter prior to the quarterly period in which the production period began for which the CFC issued the tax credit certificate, and
Ending on the due date of the claimant's most recent sales and use tax return filed with us prior to making the irrevocable election and filing a claim for refund of sales and use tax.

The production period for a qualified motion picture begins when pre-production of the qualified motion picture starts. Pre-production means the preparation process for actual physical production which begins after a qualified motion picture has received a firm agreement of financial commitment.

This period is known as the initial refund period. The following is an example of the application of the initial refund period:

If pre-production began during the third quarter of 2015 (July 1 through September 30, 2015), the start date of the initial refund period is April 1, 2015, which is the first day of the second quarter of 2015, the calendar quarter prior to the quarterly period in which the production period began.

Secondary Refund Period

Unused credits may be used to offset and obtain a refund of qualified sales and use taxes reported and paid for a secondary refund period if a claimant files an irrevocable election to apply unused tax credits to qualified sales and use taxes and:

Does not claim a refund for the initial refund period, or
Claims a refund for the initial refund period and still has unused credits to which the election applies.

The secondary refund period includes the claimant's reporting periods for the five years after the close of the initial refund period.

Example:
If the end of the initial refund period is determined by referencing the second quarter of 2015's sales and use tax return due date, then the secondary refund period includes the third quarter of 2015 through the second quarter of 2020.

Is there a statute of limitation for filing a claim for refund in relations to the tax credit?

Per RTC section 6902, we can only refund qualified sales and use taxes remitted during the initial and secondary refund periods if the claim for refund is filed within the statute of limitations. This means the deadline for filing a timely claim for refund is generally whichever of the following occurs last:

Three years from the return's due date,
Six months from the date of overpayment, or
For payments made on a determination, six months from the date the determination became final.

Example:
The CFC issues a credit certificate to a qualified taxpayer for a production whose production period began in the third quarter of 2014. Therefore, the initial refund period includes the second quarter of 2014. Under the three-year statute of limitations, to obtain a refund for the second quarter of 2014, a claim for refund must be filed by July 31, 2017. Likewise, to obtain a refund for the third quarter of 2014, a claim for refund must be filed by October 31, 2017.

What is the annual cap on the tax credit?

For the 2024, 2025, and 2026 calendar years, the Film and Television Tax Credit Program sales and use tax offset is limited to $5,000,000 in each of the 2024, 2025, and 2026 calendar years for each claimant.

For credit amounts more than $5,000,000, the claimant may do both of the following:

Elect to obtain a refund of the qualified sales and use taxes paid or offset that excess credit amount, or assigned portion, against the qualified sales and use taxes imposed, in the reporting periods during the 2024, 2025, and 2026 calendar years. The total amount of refunds or credit offsets shall not exceed $5,000,000 per claimant in each of those calendar years.
If the claimant has not exhausted the excess credit amount, or assigned portion described above, they may offset the remaining excess credit amount, or assigned portion, against the qualified sales and use taxes imposed in the reporting periods in the five years following and including the reporting period beginning on and after January 1, 2027.

These limitations will not apply to the 2025 or 2026 taxable years if the Director of Finance determines that there are sufficient General Fund revenues and pursuant to legislation in the annual Budget Act to not apply the limitation for the specified year.

For more information, see Senate Bill (SB) 167 (Stats. 2024, ch. 34) and SB 175 (Stats. 2024, ch. 42).

How do I make an irrevocable election and file a claim for refund of sales and use tax?

To make an irrevocable election to apply tax credits to sales and use tax and file a claim for refund, you must complete CDTFA-318, California Film and Television Tax Credit. If you use credits in the secondary refund period, you must file a separate CDTFA-318. You may also need to file an additional CDTFA-318 to secure periods within the three-year statute during the secondary refund period.

Claims should be sent to:
Refunds Section MIC 39
California Department of Tax and Fee Administration
P.O. Box 942879
Sacramento CA 94279-0039

After receiving the claim for refund, our team members will:

Send a letter to the claimant acknowledging that we received their claim.
Verify that the claimant is either the qualified taxpayer that was issued a credit certificate by the CFC, or the qualified taxpayer's affiliate that has been assigned unused credits.
Verify that the claimant filed a claim for refund and irrevocable election (CDTFA-318) to apply credits against qualified sales and use taxes paid during a qualifying refund period.
Verify that the claimed amount does not exceed the claimant's unused tax credits.
Verify that the claimed amount is for paid qualifying sales and use tax.
Verify that the claim for refund is within the statute of limitations.
Work with FTB to ensure the total amount claimed at both agencies does not exceed the claimants' total tax credit.

It takes approximately 45 to 90 days to process refund claims under $50,000, and 120 to 180 days to process refund claims of $50,000 or more.

Resources

Laws and Regulations

Forms

CDTFA-318, California Film and Television Tax Credit

Related Websites

If You Need Help

If at any time you need assistance, feel free to contact us by telephone or email. For contact information and hours of operation, see our How to Contact Us webpage.

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