Governor Gavin Newsom has signed a bill that raises the cap on California’s film and TV tax credits to $750 million. This is up from the previous $330 million. Newsom was joined by Los Angeles Mayor Karen Bass, legislators, and union representatives at the signing ceremony.
He said that the state needed to do something meaningful to stop productions from moving to other states and countries. The boost in tax credits is expected to help the production sector that has been hit hard by the COVID-19 pandemic, labor strikes, reduced spending, and wildfires. “We’ve got to step up our game,” Newsom stated.
Rebecca Rhine, Directors Guild of America executive, praised Newsom for his commitment to the production incentive boost despite other challenges.
California boosts production tax incentives
Critics argue that the tax credit program is a corporate giveaway that doesn’t generate the promised economic benefits.
However, the state’s new approach aims to retain and attract more production work to California. Lawmakers are now focusing on a separate bill, AB 1138, which aims to expand the provisions of the tax credit program. This bill proposes to broaden the types of productions eligible for the program and to increase the tax credit to as much as 35% of qualified expenditures for movies and TV series shot in the Greater Los Angeles area, and up to 40% for productions outside the region.
California currently offers a 20% to 25% tax credit to offset qualified production expenses. The proposed increase aligns more closely with incentives from other states like Georgia, which offers a 30% credit. Newsom also expressed hope for a federal film and TV tax incentive, especially after President Trump announced a 100% tariff on films shot overseas.