Movies

How California legislators aim to sweeten film tax credits for Hollywood

BBG News

California lawmakers are considering boosting their film tax credit to a maximum of 35%, which would help pay for expenses related to making films and TV shows in the Los Angeles area. This move is part of an effort by the state to entice movie and TV production companies to return to California.

Projects filmed beyond the specified area, encompassing Ontario International Airport, Agua Dulce, Piru, and Pomona, will incur an extra 5% on top of the standard tax rate. Consequently, these productions might qualify for a 40% credit.

The newly proposed regulations are integral components of twin bills under consideration in California’s State Assembly and Senate. These bills aim to update the state’s film and television tax credit system to ensure competitiveness with other states and nations, as stated by Assembly Member Rick Chavez Zbur, one of the co-authors. He referred to it as a “bill focused on job creation.

He pointed out, “We have the soundstages, we have the skilled labor force here, but other states are also investing. If we don’t make our program competitive, we’re essentially aiding those states in developing their workforces, making them more competitive against us.

Currently, California offers a tax credit of between 20% and 25% to cover eligible production costs, which include expenditures like hiring film crews and constructing sets. This credit can be utilized by production firms to offset any taxes they owe in California.

Increasing the tax credit to 35% makes California’s incentives more comparable to those offered by other states, such as Georgia, which offer up to a 30% credit for film productions and have attracted many recent projects.

The bump was also intended to ensure that California remains on par with other competitive states like Georgia, which cover all expenses through their tax rate. Since California’s tax credit applies only to costs below the line, increasing the amount beyond what Georgia offers would make California’s program “roughly comparable,” according to Zbur.

Beyond boosting the tax credit, the suggested law also broadens the eligibility requirements for projects that can receive an incentive.

According to the plan, eligible productions have been expanded to encompass animated films, briefs, and series, along with scripted series featuring episodes lasting at least 20 minutes and popular “mass-employment competition shows” such as “Dancing With the Stars.” However, conventional reality TV shows, game shows, talk shows, or documentary programs do not meet the criteria. (Zbur added.)

Discussions are ongoing regarding certain parts of the plan, particularly concerning the standards for indie movies and strategies to boost opportunities for underserved groups in the workforce.

A little over a month has passed since Zbur, Assemblymember Isaac Bryan, and state Sen. Ben Allen initially disclosed their jointly sponsored bills. They mentioned then that the specifics of these bills were yet to be finalized among relevant parties.

Last year, Governor Gavin Newsom suggested enhancing California’s film and television tax credit program. His proposition aims to boost the annual allocation to this program significantly, as part of a strategy to enable California to contend more effectively with other states’ tax benefits in the entertainment industry.

The suggested $750 million needs to be approved during the state’s budget approval procedure; the lawmakers’ bills detail how this sum will be utilized and distributed.

During a press conference in February, it was stated that California’s film and television tax credit program has led to approximately 200,000 jobs being created and stimulated an economic activity of $26 billion across the state. However, there are more applications for the program than available awards, and over 75% of projects that do not receive a tax credit end up being produced elsewhere.

Read More

2025-03-27 00:31

Previous post Millions of Marvel fans flock to the backs of chairs for the reveal of the Avengers: Doomsday cast
Next post Zendaya’s Epic Look as Bride-to-Be on The Odyssey Set