California Form 3541 - California Motion Picture And Television Production Credit - 2013 Page 3
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5Instructions for Form FTB 3541
California Motion Picture and Television Production Credit
What’s New
General Information
For taxable years beginning on or after January 1, 2011, the California
A Purpose
Motion Picture and Television Production Credit can reduce tax below the
tentative minimum tax (TMT) for corporations. For more information,
Use form FTB 3541 to report the credit for the production of a qualified
see Revenue & Taxation Code (R&TC) Section 23036 or get Schedule P
motion picture in California that was:
(100), Alternative Minimum Tax and Credit Limitations – Corporations.
• Allocated from the CFC on Form M, Tax Credit Certificate.
• Passed through from S corporations, estates, trusts, partnerships, or
Important Information
limited liability companies (LLCs) taxed as partnerships.
• Purchased from a qualified taxpayer.
California Motion Picture and Television Production Credit. For
• Assigned to or from an affiliated corporation under R&TC
taxable years beginning on or after January 1, 2011, Revenue & Taxation
Section 23685(c)(1). For more information, see General
Code (R&TC) Section 17053.85 and Section 23685 allow a qualified
Information C, Credit Assignment.
taxpayer a California motion picture and television production credit
• Applied or will be applied against BOE qualified sales and use taxes.
against the net tax (individuals) or tax (corporations) and/or qualified
For more information, go to boe.ca.gov and search for ca film.
sales and use tax. The credit, which is allocated and certified by the
Note: Each entity that received or assigned a motion picture and
California Film Commission (CFC), is 20% of expenditures attributable
television production credit from or to another entity within a combined
to a qualified motion picture or 25% of production expenditures
reporting group must complete a separate form FTB 3541.
attributable to an independent film or a television series that relocates to
S corporations, estates, trusts, partnerships, or LLCs taxed as
California.
partnerships should complete form FTB 3541 to figure the amount
Write “CFC Credit”– Taxpayers attaching form FTB 3541, California
of credit to pass-through to shareholders, beneficiaries, partners, or
Motion Picture and Television Production Credit, to the tax return should
members. The credit is not allowed at the pass-through entity level.
write “CFC Credit” in red ink at the top margin of their tax return.
Attach this form to Form 100S, California S Corporation Franchise or
Use of Credit – The credit can be used by the qualified taxpayer to:
Income Tax Return; Form 541, California Fiduciary Income Tax Return;
• Offset franchise or income tax liability. Use credit code number 223
Form 565, Partnership Return of Income; or Form 568, Limited Liability
when claiming this credit.
Company Return of Income. Show the pass-through credit for each
• Sell to an unrelated party (independent films only).
shareholder, beneficiary, partner, or member on Schedules K-1 (100S,
• Assign to an affiliated corporation.
541, 565, or 568), Share of Income, Deductions, Credits, etc.
• Apply against qualified sales and use taxes.
Corporate taxpayers attach this form to Form 100, California Corporation
This credit is not refundable.
Franchise or Income Tax Return, or Form 100W, California Corporation
Franchise or Income Tax Return - Water’s Edge Filers.
Sales and Use Taxes – A qualified taxpayer who has been issued a
certified Form M, Tax Credit Certificate, from the CFC may make an
Individual taxpayers attach this form to Form 540, California Resident
irrevocable election with the Board of Equalization (BOE) to apply the
Income Tax Return, or Form 540NR, California Nonresident or Part-Year
credit against qualified sales and use taxes. For more information, go
Resident Income Tax Return.
to boe.ca.gov and search for ca film.
B Definitions
Credit Assignment – A qualified taxpayer that is a corporation or is taxed
as a corporation and whose credit exceeds the tax may elect to assign
Credit certificate. Credit certificate means the certificate issued by the
the credit to an affiliated corporation(s). The election to assign the credit
CFC for the allocation of the credit to a qualified taxpayer.
is irrevocable. For more information, see General Information C, Credit
Qualified taxpayer. Qualified taxpayer means a taxpayer who has paid or
Assignment.
incurred qualified expenditures and has been issued a credit certificate
Sale of Credit Attributable to an Independent Film – A qualified taxpayer
by the CFC. In the case of any pass-through entity, the determination of
may sell a credit, attributable to an independent film, to an unrelated
whether a taxpayer is a qualified taxpayer is made at the entity level. The
party once the taxpayer receives Form M from the CFC. The credit can
credit is not allowed at the pass-through entity level. The credit is passed
only be sold by the qualified taxpayer that generated the credit (that is a
through to the shareholders, beneficiaries, partners, or members.
corporation, a Limited liability company (LLC) or partnership taxed as a
Qualified motion picture. Qualified motion picture means a motion
corporation, or an individual) or by a shareholder, beneficiary, partner, or
picture that is produced for distribution to the general public, regardless
member who received the credit as their distributive or pro-rata share.
of medium. For more information, refer to the R&TC Section 17053.85,
For more information, get form FTB 3551, Sale of Credit Attributable to an
Section 23685, or go to film.ca.gov.
Independent Film, or go to ftb.ca.gov and search for motion picture.
Independent film. Independent film means a motion picture with a
Seller – A qualified taxpayer that sells an independent film credit is
minimum budget of one million dollars ($1,000,000) and a maximum
required to report the gain on the sale of the credit in the amount of
budget of ten million dollars ($10,000,000) that is produced by a
the sale price.
company that is not publicly traded and publicly traded companies do
Buyer – If the credit was purchased for less than the credit amount
not own, directly or indirectly, more than 25 percent of the producing
stated on Form M, the buyer is required to report income in the
company.
amount of the difference between the credit amount claimed on its
Television series. Television series means a television series that
return and the purchase price.
relocated to California, without regard to episode length or initial
media exhibition, that filmed all of its prior season or seasons outside
of California and for which the taxpayer certifies that this credit is the
primary reason for relocating to California.
FTB 3541 Instructions 2013 Page 1
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