California legislature approves $750 million film tax credit
California lawmakers have approved a plan aimed at keeping Hollywood in Hollywood by giving production companies more financial incentives to stay.
Hollywood has been struggling for years with productions leaving California, lured away to other states offering bigger incentives and tax breaks, but the deal made on Friday could change that.
The bill was initially proposed by California Governor Gavin Newsom last fall.
As part of the legislature-approved state budget, it easily passed both the assembly and the Senate on Friday, making it official. The bill now heads to the governor's desk for a signature.
The expansion will increase the cap on California's film and TV tax incentives from $330 million to $750 million a year -- making California one of the top states for capped film incentive programs.
It provides tax credits based on qualified expenses for eligible productions. The new legislation also expands the categories that qualify to include shorter TV shows, sitcoms, animated titles and large-scale competition shows.
People in the industry have been lobbying for the expansion for months as they deal with the aftermath of the pandemic, strikes, and major competition from other states and countries.
Dominic Patten, the executive editor at Deadline, points out that a change like this also helps the vendors.
"People like, people that supply the plants, supply the lumber, who do the dry cleaning, all that kind of stuff for productions, they will now see some of that money funneling down to them," Patten said. "Is it going to get us back to the levels we were at pre-pandemic? That ship might have sailed. There's a different kind of world out there with streaming and what have you, but I do think we're going to see at least some sort of return to normalcy, or at least the creation of a lucrative new normal."
States like New York and Georgia still offer more, but this certainly puts California in the ballpark.
That being said, lawmakers say there's still more work to do. A second bill, to be voted on next week, would modernize the tax credit program to make sure California gets the greatest possible return on the $750 million investment.
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