August 31, 2010
Pursuant to Information Letter 2010-3, issued by the CA Franchise Tax Board on July 29, 2010, California residents are allowed to claim a credit against California taxes for income taxes paid to Oregon on "qualifying compensation". Qualifying compensation is defined as wages paid by an employer to an employee for services performed in Oregon in connection with a qualifying film production.
Generally, California does not allow a California resident to claim a credit equal to the tax paid to the other state if the other state allows a credit or refund of the income taxes imposed by that state. Oregon generally allows a credit or refund to nonresidents for taxes paid to their resident state but it does not allow a California resident to claim a credit for taxes paid on "qualifying compensation".
As a result of Oregon not allowing a California resident to claim a refund of the Oregon taxes paid on "qualifying compensation", the FTB has determined that California residents may claim a credit on their California resident tax return for taxes paid to Oregon on "qualifying compensation".
For a copy of Information Letter 2010-3, click here.
For more information please contact:
Vice President, Film & TV Production Incentives
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