California’s film tax credit boost officially signed into law to lure back Hollywood jobs
Approximately nine months ago, Governor Gavin Newsom vowed to significantly increase the yearly budget for California’s film and TV tax credit initiative by more than double its current value.
Accompanied by Los Angeles Mayor Karen Bass, key lawmakers, and labor union officials, Newson emphasized that California needed to take a firm stance and undertake an action that would be impactful to prevent film productions from moving to other locations offering more attractive incentives.
Despite originating in California and the entertainment industry becoming synonymous with the state, “our creation is now challenging us on a global scale,” he remarked back then.
On Wednesday, Governor Newsom approved a bill raising the limit for California’s film and TV tax credit program to $750 million – an increase from its previous level of $330 million. Those working in the industry believe this increase will spur production that had slowed due to factors like the pandemic, writer and actor strikes in 2023, reduced studio and streaming spending, as well as the wildfires in Southern California earlier this year.
In his speech prior to signing the bill, Newsom emphasized that it’s time for us to raise the bar. We’ve been complacent, taking things easy. It’s necessary for us to take bolder and more meaningful action now.
Last week, the state legislature approved a bill that followed extensive advocacy efforts by Hollywood.
Rebecca Rhine, an executive at the Directors Guild of America and President of the Entertainment Union Coalition, acknowledged Governor Newsom’s resilience in maintaining his support for the production incentive increase amidst challenges such as wildfires in Southern California, federal funding reductions, California’s budget shortfall, and the mobilization of the National Guard in Los Angeles.
She emphasized during the ceremony that our sector plays a significant role in the state’s economic health, artistic vitality, and support for numerous local businesses, while drawing tourists globally. Now, it’s time to focus on getting individuals back to their jobs.
Critics and fiscal watchdogs argue that this program amounts to a corporation-friendly tax break, providing less economic benefit than initially claimed. The expansion in California coincides with other states such as Texas and New York boosting their own film and television tax incentive schemes.
However, the battle isn’t finished just yet. Lawmakers and leaders from the movie industry are preparing for a vote this Thursday in the legislature on a separate bill. This bill aims to extend the benefits of the film tax credit program, which they believe is crucial for making production more appealing in California. They argue that this expansion should coincide with an increase in the program’s maximum limit.
As a movie enthusiast, I’m all about expanding the horizons of filmmaking! That’s why I’m backing AB 1138. This bill would open up the program to a wider range of productions, from animated films and shorts to series and big-ticket competition shows. Plus, it boosts tax credits! For movies and TV series produced in Greater Los Angeles, the credit could go as high as 35%, while outside the region, it could reach an impressive 40%. Let’s bring more diverse stories to life!
Currently, California offers a tax credit ranging from 20% to 25% to help cover eligible production costs, including expenditures for hiring film crews and constructing sets. These production firms can utilize this credit to reduce their tax obligations within California.
Increasing the incentive to 35% makes California’s offer more comparable to that of other states like Georgia, which grants a 30% tax credit for film productions.
During yesterday’s press meeting, Assemblymember Rick Chavez Zbur stated that this bill represents the second phase of action. It focuses on boosting economic growth, ensuring fairness, and reversing job losses by addressing them head-on.
Newsom expressed optimism about the potential of a federal tax break for movies and television shows, an idea he proposed in May following President Trump’s suggestion of import tariffs on foreign-produced films.

Hollywood Inc.
The day following President Trump’s announcement of a 100% tariff on foreign-produced films, Hollywood expresses its response to this news.
Newsom expressed his desire for [Trump] to share our level of ambition, particularly in California’s film industry, throughout the entire U.S. He also expressed optimism about collaborating with the administration to maintain and grow this industry within the country.
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2025-07-02 23:01