Form 3541 - California Motion Picture And Television Production Credit

2015 Instructions for Form FTB 3541

California Motion Picture and Television Production Credit

What’s New

or an individual) or by a shareholder, beneficiary, partner, or member

who received the credit as their distributive or pro-rata share. For

California Film and Television Tax Credit - For taxable years beginning

more information, get form FTB 3551, Sale of Credit Attributable to an

on or after January 1, 2016, a new film credit against tax will be allowed.

Independent Film, or go to ftb.ca.gov and search for motion picture.

The new tax credit is allocated and certified by the California Film

Seller – A qualified taxpayer that sells an independent film credit is

Commission (CFC). The credit is:

required to report the gain on the sale of the credit in the amount of

• 25% of the qualified expenditures attributable to the production of

the sale price.

either a television series that relocated to California in its first year of

Buyer – If the credit was purchased for less than the credit amount

receiving a tax credit allocation or an independent film.

stated on the CFC Tax Credit Certificate, the buyer is required to

• 20% of the qualified expenditures attributable to the production of

report income in the amount of the difference between the credit

a qualified motion picture in California or a television series that

amount claimed on its return and the purchase price.

relocated to California that is in its second or subsequent years of

Credit Assignment – A qualified taxpayer that is a corporation or is taxed

receiving a tax credit allocation.

as a corporation and whose credit exceeds the tax may elect to assign

Additional credits, not to exceed a total of 5% of qualified

the credit to an affiliated corporation(s). The election to assign the credit

expenditures, may be allowed:

is irrevocable. For more information, see General Information C, Credit

• 5% of qualified expenditures relating to music scoring or music

Assignment.

track recording attributable to the production of a qualified motion

Sales and Use Taxes – A qualified taxpayer who has been issued a

picture in California.

certified CFC Tax Credit Certificate may make an irrevocable election

• 5% of qualified expenditures relating to qualified visual effects

with the Board of Equalization (BOE) to apply the credit against qualified

attributable to the production of a qualified motion picture in

sales and use taxes. For more information, go to boe.ca.gov and search

California.

for ca film.

• 5% of qualified expenditures relating to original photography

outside the “Los Angeles Zone”.

General Information

For more information, go to the CFC website at film.ca.gov and search

for incentives.

A Purpose

Important Information

Use form FTB 3541 to report the credit for the production of a qualified

motion picture in California that was:

California Motion Picture and Television Production Credit. For

• Allocated on the CFC Tax Credit Certificate.

taxable years beginning on or after January 1, 2011, California Revenue

• Passed–through from S corporations, estates, trusts, partnerships,

and Taxation Code (R&TC) Section 17053.85 and Section 23685

or LLCs taxed as partnerships.

allow a qualified taxpayer a California motion picture and television

• Purchased from a qualified taxpayer.

production credit against the net tax (individuals) or tax (corporations)

• Assigned to or from an affiliated corporation under R&TC

and/or qualified sales and use tax. The credit, which is allocated and

Section 23685(c)(1). For more information, see General

certified by the CFC, is 20% of expenditures attributable to a qualified

Information C, Credit Assignment.

motion picture or 25% of production expenditures attributable to an

• Applied or will be applied against BOE qualified sales and use taxes.

independent film or a television series that relocates to California.

For more information, go to boe.ca.gov and search for ca film.

For taxable years beginning on or after January 1, 2011, the California

Note: Each entity that received or assigned a motion picture and

Motion Picture and Television Production Credit can reduce tax

television production credit from or to another entity within a combined

below the tentative minimum tax (TMT) for corporations. For more

reporting group must complete a separate form FTB 3541.

information, see R&TC Section 23036 or get Schedule P (100),

S corporations, estates, trusts, partnerships, or LLCs taxed as

Alternative Minimum Tax and Credit Limitations – Corporations.

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;

Form 565, Partnership Return of Income; or Form 568, Limited Liability

• Offset franchise or income tax liability. Use credit code 223 when

Company Return of Income. Show the pass-through credit for each

claiming this credit.

• 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.

Sale of Credit Attributable to an Independent Film – A qualified

Individual taxpayers attach this form to Form 540, California Resident

taxpayer may sell a credit, attributable to an independent film, to an

unrelated party once the taxpayer receives the California Film and

Income Tax Return, or Form 540NR, California Nonresident or Part-Year

Television Tax Credit Program Tax Credit Certificate (hereafter, CFC Tax

Resident Income Tax Return.

Credit Certificate or credit certificate). The credit can only be sold by

the qualified taxpayer that generated the credit (that is a corporation, a

limited liability company (LLC) or partnership taxed as a corporation,

FTB 3541 Instructions 2015 Page 1

Form 3541 - California Motion Picture And Television Production Credit - 2015 Page 3

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