Film Tax Credit Bills Clear Legislative Hurdle In Sacramento

Two bills aimed at making California’s film and TV production industry more competitive with other popular filming markets are working their way through the state legislature.

State assemblymembers have referred to the credit's expansion as the “last hope” for filming in California, which has sagged in recent years, in turn hitting studio real estate.

The bills would increase the tax credit up to 35% and broaden the types of productions that the credit could apply to, the Los Angeles Times reported. 

Last year, soundstage occupancy levels dropped to 63% from 69% in 2023, the LA Times reported. The first three months of the year saw a drop in the production of television shows, feature films and commercials in LA, according to FilmLA. Some have begun to worry that Hollywood could find itself in a similar position to Detroit after the automobile industry moved out.

The bills have the support of Gov. Gavin Newsom but have drawn criticism from some who say that the economic benefits they bring are far less than supporters claim. 

Supporters counter that the cost of not incentivizing production to return to LA is too great. 

“This is not a tax giveaway,” Assemblymember Rick Zbur, a co-sponsor of the bills, told a crowd at Burbank’s Evergreen Studios earlier this month. “This is a job program that is keeping people in their homes, keeping people off the unemployment rolls. If we don’t do this, it’s going to cost a lot, lot more than these tax credits are costing us.”

The state doesn't have the bandwidth to support programs that don't give as good as they get. Following two years of budget woes, California faces another bumpy year ahead, with the potential for federal funding to evaporate and a lack of clarity about how much tariffs will crimp the state's economy. 

“It’s going to be a fight to get this done because of the headwinds,” Sen. Ben Allen, another co-sponsor of the bills, said at the Evergreen Studios event.