After a decade of seeing ‘runaway’ productions leaving to shoot in Canada, other US states and parts of Europe, in 2009 California finally introduced a film tax incentive intended to add a fiscal bonus to the underlying attractions of the historical home of the US entertainment industry: a vast production infrastructure, thousands of famous locations and year-round shoot-friendly weather. The original programme, though, was seen by many as a half measure, and it took the 2015 launch of the state’s redesigned ‘2.0’ film and TV tax credit programme to really start pulling production back to the Golden State.
The new programme — designed in part to attract bigger-budget features and lure TV series away from other states — tripled the size of the state’s annual incentive pool, eliminated budget caps, designated funding pots for four different types of productions and introduced a ‘jobs ratio’ selection formula to replace the original scheme’s lottery system.
In its second year, the funding for the programme increased from $230m to $330m, with 40% ($132m) being allocated for new and recurring TV series, miniseries, pilots and movies-of-the-week; 35% ($115.5m) for non-independent features; 20% ($66m) for relocating TV series; and 5% ($16.5m) for independent features.
Less for indies
The 2.0 programme has mostly been welcomed, though it has attracted criticism from some independent producers because it sets aside only 5% for indie projects compared to the 10% that was designated in the original programme. In its first year, the new programme allocated credits of $201m to 55 projects (including 18 TV series, 13 non-independent films and five independent films) with an aggregate in-state spend of $1.5bn. In the first two of five allocations for the programme’s second year, credits totalling $65m were allocated to 11 TV series with a total spend of $464m, and credits adding up to $108m went to 26 features (10 independent and 16 non-independent) with a total spend of $875m.
Features drawn to shoot in California over the past year by the new incentive have included CHiPs, Miles, Magic Camp, God Particle, Why Him? and A Wrinkle in Time. The latter, a family adventure from Walt Disney Pictures, was the first $100m-plus tentpole production selected for the new programme and it filed to spend $83.5m in the state and get a credit of $18.1m (it also shot in New Zealand).
Features that have been accepted by the programme but are yet to shoot include indie thriller Hotel Artemis, Warner Bros’ remake of A Star Is Born and an untitled Paramount project that is expected to bring more than $100m in qualified in-state spending, including $50m in below-the-line wages.
TV series shot in California over the past year include Westworld, This Is Us, 13 Reasons Why, American Crime, which relocated from Texas, and Ballers, which relocated from Florida for its third season shoot. It is expected to generate $33.5m in qualified California expenditures and has been conditionally approved for a credit of $8.3m.
Upcoming TV series shoots include The Affair, The OA (both relocating from New York), Lucifer and Legion (both persuaded to move south from Vancouver).
The California film incentive programme could continue evolving in the future. Committees in the state legislature recently held a hearing to consider adding diversity benchmarks to the scheme and they were told that, under the original programme, women took only 29% of the below-the-line jobs created, Hispanics 11% and African Americans just 4%.
California’s incentive programme offers different kinds of support for different kinds of productions. There is a 25% non-transferable tax credit for existing TV series with minimum budgets of $1m per episode that are relocating to the state from another area. Independent films (defined as films made by companies that are not publicly traded or more than 25% owned, directly or indirectly, by a publicly traded company) with budgets of at least $1m can apply for a 25% transferable credit applying only to the first $10m of qualified expenditures. And there is a 20% non-transferable tax credit for feature films with minimum $1m budgets (with the credit applying only to the first $100m in qualified spend), new scripted TV series with minimum budgets of $1m an episode, TV pilots with minimum budgets of $1m and movies-of-the-week and miniseries with minimum budgets of $500,000. Productions receiving the 20% credit can also get a 5% uplift applied to music scoring and music-track recording, visual-effects work and filming done outside the 30-mile Los Angeles ‘studio zone’.
Full details on financial incentives in California: California Film Commission
Infrastructure and crews
In southern California, Los Angeles has hundreds of equipment rental houses, production and post facilities, a huge crew base and 5 million sq ft of soundstage and studio space, with major sites including Fox Studios, Warner Bros, Sony Pictures, Hollywood Center Studios, Raleigh Studios and Santa Clarita Studios. In northern California, San Francisco and Silicon Valley are home to Pixar, Dolby, Industrial Light & Magic and scores of other animation and film technology companies. “There is a bottomless pool of resources,” says Richard S Wright, producer of Lakeshore Entertainment’s sci-fi feature AXL (previously Miles). “You can’t run out of crew, soundstages, cameras, lighting… The crew is local, the actors are local, the equipment is local. If you suddenly need an obscure piece of equipment on your location in 90 minutes, you can do that.”
California is the third largest state in the US, and from Los Angeles in the south to San Francisco in the north is about 90 minutes by air or a seven-hour drive. Los Angeles International Airport (LAX) and San Francisco International Airport — both 11-12 hour flights from Europe — are the major hubs, and there are about a dozen large commercial airports in the state.
Richard S Wright, producer, AXL, says:
“We qualified for the California film tax credit. That made it a very simple decision [to shoot in California]. It is probably the best thought out and best organised credit in the world. They’ve really done their homework to make sure it’s fair and that it does what it’s intended to do. The problem is it’s capped. It almost feels like a lottery.”
Would he come back?
“If we qualified for the tax credit, there’d be no reason not to shoot in California.” Without qualifying, “it depends on the production. There are certain shows that would be difficult to do anywhere else.”
First person to call
Amy Lemisch, director, California Film Commission
Need to know
- DO remember Los Angeles is a company town. If you are shooting there take the opportunity to play the field of talent agencies, studios and production companies and schmooze at industry hangouts such as The Ivy, The Polo Lounge and Ammo and industry events including the annual round of award ceremonies (January and February), the Los Angeles Screenings (May) and AFI Fest and the American Film Market (November).
- DO study the state film commission’s jobs ratio calculator, which is used to pre-select projects for tax credits. A project’s base job ratio is the sum of its qualified wages and 35% of its qualified non-wages divided by its estimated tax credit. The base ratio is adjusted by bonus points given for local visual-effects work, days spent shooting in state facilities and days spent filming outside of Los Angeles.
- DO book studio space early. A recent upswing in TV and video streaming production has increased demand and available soundstages can be hard to find.
- DON’T forget while California has 315 sunny days a year, the ‘June Gloom’ weather pattern can result in overcast morning skies in Los Angeles from May to as late as August.
- DON’T overlook locations outside the big cities — along the state’s 800-mile Pacific coastline are picturesque small towns and natural beauty spots such as Yosemite, Death Valley and Mojave Desert.
- DON’T get caught out by pilot season, the period from February to April when pilots for the following autumn’s new TV series are shot. The intense period of production activity stretches even the extensive resources of southern California, making it difficult for other kinds of projects to find available studio space and on- and off-screen talent.