Governor Newsom proposes historic expansion of film & TV tax credit program

News

Oct 27, 2024

What you need to know: California's Film & Television Tax Credit Program has generated tens of billions of dollars in investments while creating nearly 200,000 jobs, and Governor Newsom is proposing to expand it to outpace other states and bring more business back to California.

Hollywood, California - Governor Gavin Newsom today announced a proposal to expand California's Film & Television Tax Credit Program to $750 million annually, a massive increase from the current $330 million annual allocation. This ambitious expansion would position California as the top state for capped film incentive programs, surpassing other states like New York.

California is the entertainment capital of the world, rooted in decades of creativity, innovation, and unparalleled talent. Expanding this program will help keep production here at home, generate thousands of good-paying jobs, and strengthen the vital link between our communities and the state's iconic film and TV industry.

Governor Gavin Newsom

Generating investments & creating jobs

A study of the program found that, for every tax credit dollar approved, it generated at least $24.40 in output, $16.14 in GDP, $8.60 in wages, and $1.07 in initial state and local tax revenue from production in the state.

Since its inception in 2009, California's Film & Television Tax Credit Program has generated over $26 billion in economic activity and supported more than 197,000 cast and crew jobs across the state.

California previously updated the program to include new workforce diversity provisions, more funding for the Career Pathways Training Program, and the nation's first Safety on Production Pilot Program.

Tax credits will become refundable for the first time since the program's inception in 2009, beginning with Program 4.0 set to commence on July 1, 2025.

Why expansion is needed

This program has been oversubscribed year after year, with more productions applying than can be accommodated under the current cap.

Between 2020 and 2024, data shows California lost production spending due to limited tax credit funding and increased competition in other states and countries, directly impacting state jobs and local economies​​.

In recent years, projects that were unable to secure California's tax credits and moved to other locations as a result contributed to significant economic losses, with an estimated 71% of rejected projects subsequently filming out-of-state.

"Hollywood is the cornerstone of this city and our economy and our message to the industry today is clear - we have your back," said Mayor Karen Bass."When I was Speaker of the California State Assembly, I worked to support leaders like now-Councilman Paul Krekorian to create the film tax credit. Despite the economy being in a difficult spot, we knew that the industry needed support, and if we could at least start the program, then we could grow it. Today I'm proud to stand with Governor Newsom and industry leaders to continue this important work supporting this legacy industry."

Film & TV tax credit recipients in California

• September 2024: Indie films and "Suits LA." $51.6 million to support 19 projects, including 15 independent films. Expected to generate $284.4 million in spending, with $112.1 million allocated to wages, and over 3,800 jobs.
• July 2024: Five new TV projects, including HBO's "Latitude" and 20th Television's "All's Fair."​ $58 million in tax credits went to five television projects, which was expected to generate $386 million across 438 filming days. Estimated to support 15,869 background performers, 1,196 crew members, and 685 cast members.
• March 2024: Amazon's Fallout relocated to California. $152 million in tax credits went to 12 projects, including Fallout's second season relocating from New York. Projected to bring in over $1.1 billion in spending across the state and support 4,500 cast and crew members, plus 50,000 background performer days.
• December 2023: The Mandalorian & Grogu to film in California. With a total of $400 million allocated to 15 projects, including Lucasfilm's The Mandalorian & Grogu alone that was set to inject $166 million into California's economy. Nearly 20,000 jobs created, including 2,252 crew and 598 cast. Other productions included "The Accountant 2" by Amazon Studios, "Untitled 20th Film," Disney's untitled live-action feature​.

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