Done Deal: California Greenlights $750 Million Infusion to Film and TV Tax Credit Program

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Governor Gavin Newsom of California received approval for his strategy to entice Hollywood productions to return to their roots, as a budget bill enhancing the state’s entertainment tax credit program was passed by both houses in the state legislature on Friday.

The legislation passed successfully, fulfilling Governor Newsom’s aspiration to boost California’s film and TV tax incentives cap from $330 million annually to a staggering $750 million. This move positions California as the most generous state in terms of incentives, trailing only New York and Georgia, whose program has no limit. Despite initial doubts about Newsom’s proposal, which was unveiled in autumn 2024, it eventually gained widespread support. The State Assembly endorsed the increase with a landslide vote of 64 to 1, while the Senate followed suit with a vote of 31 to 3.

On Friday, the Entertainment Union Coalition, who are influential advocates for legislation in Sacramento, stated that the recent decision emphasizes the crucial role our sector plays in the state’s economy and the potency of its members’ influence.

The group additionally urged the studios to seize the opportunity provided by the expanded incentive scheme. They emphasized that it was now crucial for leading corporations to reaffirm their commitment to the communities and workforce throughout the state, who have played a significant role in growing this industry and their own businesses.

Production advocates in Hollywood haven’t celebrated just yet, as they are hurriedly working on modifications to the tax credit program in an attempt to raise the base credit to 35%. This needs to be accomplished before July 7, which is when the application window for productions applying for California tax credits will close.

The revised legislation will broaden the eligibility criteria for qualifying productions, encompassing shorter TV series, sitcoms, animated shows, and large-scale competition programs (excluding reality, documentary, game, or talk shows). Additionally, it eliminates a stipulation that necessitated a distinct incentive for soundstage construction. This means recipients will no longer be required to own more than half of the stages or sign a lease lasting at least 10 years.

As a passionate gamer, I can’t help but feel the pulse of change in the air. The legislation, if it passes, will bring about the most transformative updates to our beloved gaming industry since its birth in 2009. It seems that our state has been gradually losing ground as other regions have stepped up their game with enticing incentive programs for the entertainment sector. Take Texas, for instance, which recently passed a law boosting the budget for movies and TV shows by an additional $100 million every two years. That’s a significant leap forward!

Over the upcoming ten years, the approved funding will grant approximately $1.5 billion in subsidies to Hollywood. Notably, among significant production centers, California is currently unique in disallowing any portion of top-tier costs (such as actor, director, and producer salaries) from being eligible for incentives.

Over the three-month stretch from January through March this year, every production category experienced a drop compared to the same timeframe last year, as per the latest report from FilmLA – the nonprofit organization responsible for film permits within the city and county. Notably, filming in L.A. decreased by over 22% during that period. As a devoted fan, I’m keeping a close eye on these trends and hoping for an uptick in productions soon!

At the UCLA Entertainment Symposium on Friday, Dee Dee Myers, an advisor to Newsom, stated that “This program not only recoups its costs but stimulates economic growth.” She added, “It’s a beneficial investment for taxpayers.

More to come.

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2025-06-27 23:24