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California Lawmakers Push Expanded Film Tax Credits to Counter Production Decline

Bills AB 1138 and SB 630 propose raising tax credits to 35% with an additional 5% outside Los Angeles, as production days and jobs continue to plummet.

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The Hollywood sign is a symbol of the role Los Angeles plays in the film and television industry. (Photo by David Crane/Los Angeles Daily News)
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Overview

  • California's proposed legislation seeks to modernize its film and TV tax credit program, raising the base credit to 35% and offering an extra 5% for productions outside the L.A. Zone.
  • Governor Gavin Newsom supports doubling the annual tax credit cap to $750 million, a measure aimed at retaining and attracting productions to the state.
  • FilmLA reports a 22.4% drop in on-location shoot days in Los Angeles during Q1 2025 compared to the same period in 2024, highlighting the ongoing production flight.
  • Industry figures like Ben Affleck and Rob Lowe have criticized California for losing its competitive edge to states like Georgia and countries like the U.K. offering more favorable incentives.
  • The proposed bills, set for committee hearings next week, aim to address economic losses, including $7.7 billion in activity and 28,000 jobs lost between 2015 and 2020 due to productions relocating.