Published: October 29, 2024
Photo by Ahmet Yalçınkaya on Unsplash Will California Double It's Entertainment Tax Credits By Movieguide® Contributor With production days falling in California, the state government is looking to revitalize its role in the entertainment industry by increasing movie and TV tax credits.
A massive overhaul in tax credits is on the way, spearheaded by California's governor, Gavin Newsom. As he brings the state its first major overhaul in over a decade, Governor Newsom looks to boost tax credits from roughly $330 million per year to over $750 million per year, per Deadline.
"The [current] program is oversubscribed and out of date," an insider told Deadline about California's current big and small screen program, which offers 20-25% tax credits for studio/streamer films, indie films, new TV series and relocating shows. "So many productions don't even apply because there is such a slim chance they'll be successful. And the industry, the crews and content delivery methods have changed dramatically over the past 10 years, so what the state offers doesn't meet basic needs."
While in the public's mind California remains the capital of the entertainment industry, in recent years, numerous other locations have proven better fits for productions, leading to a massive deterioration in shooting days in California.
READ MORE: HOLLYWOOD PRODUCTION CONTINUES TO SLOW
Q3 of 2024 was California's weakest production quarter since the pandemic, seeing a 5% drop from Q2. Shooting on TV Drama, TV Comedy and TV Pilot were each down significantly from the 5-year average — 34.4%, 85.7% and 46.5%, respectively — which includes last year's strikes and the numbers from the pandemic.
Earlier this month, FilmLA president Paul Audley called for the tax incentive program in California to be raised. Otherwise, the state would lose its place as the production capital of the world.
"California's film incentive is a proven jobs creator that studies show provides a net positive return on every allocated dollar," Audley said. "What the program lacks is funding and eligibility criteria that reflect the outputs of the industry in 2024. The program's structure and management through the California Film Commission — these are excellent. But just as our competitors continue to innovate, California must do the same."
In comparison to California's current $330 million per year program, New York offers $700 million per year and Texas recently added $200 million to its entertainment credit program. Newsom has clearly seen the importance of a tax credit overhaul and looks to save his state from becoming irrelevant. The new program, however, is not a surefire thing as many other lawmakers will have to agree that the investment is worth it.
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