California Governor Gavin Newsom has proposed increasing the state’s Film and Television Tax Credit Program to at least $1 billion a year, up from its current $750 million cap. If approved, it would become the largest capped film and television production incentive in the United States, as California seeks to attract projects that have moved to other states and countries.
The proposal follows last year’s increase, which raised the program’s annual cap from $330 million to $750 million through 2030. Figures from the governor’s office say the credit supported more than $8 billion in direct production spending and generated over 43,000 jobs in its first year at the higher level. Film shoot days also rose 52% year over year. However, FilmLA data showed that shoot days in the Los Angeles region from July to September fell 4.8% compared with the same period a year earlier, and were nearly 29% below the five-year average.
The proposed changes would allow the credit to cover above-the-line costs, including actors’ salaries, subject to funding caps. The program would also be extended through 2040. Companies that commit to filming at least two distinct qualifying productions in California would receive an additional 5% in credits, while annual funding for independent productions would rise from $26 million to $100 million.
The proposal comes as productions face competition from other jurisdictions offering incentives and lower labor costs. California has also taken steps to attract post-production work: in September, AB 2319 established the state’s first standalone post-production tax credit, offering rebates of 35% to 50% for eligible work.
The expansion’s final details would depend on the legislative process. Its proposed combination of a higher cap, broader eligible costs and longer-term funding is intended to make California a more attractive location for film and television production.
Sources: Cord Cutters News.