Are you a Film or Production Company looking for ways to reduce your California State Income Tax?

Film and Production companies located in the Santa Clarita Enterprise Zone can now take advantage of significant tax savings and incentives.  Find out if your production office is located in the Santa Clarita Enterprise Zone by clicking here.

Production offices currently located in the Santa Clarita Enterprise Zone or those that choose to relocate into the Santa Clarita Enterprise Zone, may take advantage of one or more of the following tax savings benefits: 

 

Hiring Tax Credits:   Claim 50% of your qualified employee’s wages (up to $9.37 per hour is claimable x 50% x the # of hours they work) in their first year of employment.  The credit percentage decreases by 10% annually over a 5 year period.

Sales or Use Tax Credit:  Receive credit for the full amount of the sales tax you paid on equipment needed for your business.  For example, if you paid $1 million dollars for new motion picture production or editing equipment during the current tax year and paid 8% sales tax on that equipment, your tax credit would be equivalent to $80,000 ($1 million x 8%).

 

 Business Expense Deduction:   Write off 40% of the cost of qualified equipment in its first year of service.  This can be written off as a business expense instead of a capital expense.

 

Net Operating Loss Carry Over:  100% of your business’s net operating loss may be carried over 15 years, instead of 50 percent for 5 years as is California law for other businesses.

 

Net Interest Deduction:  This applies to lenders who are providing a loan to you.  The lender may write off the net interest on your loan minus their expenses in making you the loan. 

Film and Production Company Example of Enterprise Zone Savings

A film and production company headquartered in the Enterprise Zone with 45 employees and $700,000 of purchased equipment during the qualifying tax period could generate $117,000 in employee tax credit savings for the business and $21,000 of equipment purchase savings for the business for a total California State Income Tax reduction of $138,000.  This $138,000 in tax savings may be used to reduce or virtually eliminate a company’s California State Income Tax altogether.

 

To learn more about how your film and production company can take advantage of the Enterprise Zone contact the City of Santa Clarita at 661/255-4347.

 

To learn about the benefits of filming in Santa Clarita visit www.FilmSantaClarita.com or call 661/284-1425.