Movies

California lawmakers approve expanded $750-million film tax credit program

BBG News

Following the challenges posed by a pandemic, two crises, and extensive wildfires, Hollywood is now receiving some much-needed support.

California lawmakers decided on Friday to significantly increase the annual funding for their film and TV tax credit scheme, boosting it from $330 million to a maximum of $750 million.

As a supporter of the film industry, I’m elated by this rise, which we’ve been advocating tirelessly to our state representatives for months regarding the critical matter at hand.

Production companies have been drawn away from California by other states and countries offering attractive tax breaks and incentives, leading to long periods of unemployment for many in Hollywood. Workers in the industry have expressed concern in interviews, public meetings, and legislative hearings that without government intervention, Hollywood could eventually lose its vitality, much like Detroit did after the decline of its automobile industry.

Rebecca Rhine, an executive at the Directors Guild of America and head of the Entertainment Union Coalition, urged that it’s high time for employees to return to work and for film production to resume in California. In her statement, she requested the studios to honor their commitment to the communities and workers statewide who have contributed significantly to the growth and success of this industry.

Last year, Governor Gavin Newsom advocated for broadening the yearly tax credit initiative, stating then that “our creation is now in competition with us.

After that, lawmakers aimed to widen the scope of the program’s guidelines. A different bill under consideration by the legislature proposes to extend eligibility to a variety of productions, such as animated films, shorts, series, and specific large-scale competition shows. This bill also seeks to enhance the tax credit, which could reach up to 35% for film and TV series production costs within the Greater Los Angeles region, and as high as 40% for productions filmed outside the area.

On Thursday, the California State Senate Revenue and Tax Committee gave a unanimous approval to bill AB 1138. This bill is set for its final vote next week.

Currently, California offers a tax credit ranging from 20% to 25%, which helps cover eligible production costs, including expenditures on film crews and set construction. This credit can be utilized by production firms to offset any tax obligations they may have within California.

Increasing the incentive to 35% aligns California’s offerings with those of other states like Georgia, who grants a 30% tax credit for productions.

Experts and professionals in the field suggest that both raising the limit on tax credits and adjusting the eligibility requirements for the incentive program need to be accepted in order to make California more appealing as a location for movie production.

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2025-06-28 00:01

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